New £35m profit shortfall hits Balfour Beatty M&E division
Balfour Beatty will re-evaluate its Mechanical and Electrical (M&E) division, following the confirmation of another £35million profit shortfall at a trading update on Thursday, with the division set to be slimmed down in response.
The Group said it has seen “further worsening in the trading performance” of the M&E service since the Q1 interim management statement, but that the shortfall would be “broadly offset by further targeted PPP disposal gains in the second half of 2014.”
Full-year PPP disposal profits will be broadly in line with those achieved in the full-year 2013.
It added that pre-tax profit expectations for 2014 remain unchanged since the Q1 IMS, in the range of £145 – £160 million, as the regional and major projects businesses, which comprise 90 percent of the UK construction business, remain on track.
The latest profit warning follows the £30m black hole in May, which ultimately led to the resignation of Chief Executive Officer Andrew McNaughton and the replacement on a temporary basis by UK Chief Executive Nick Pollard of Engineering Services MD Phil McGuire. Balfour has yet to appoint a permanent successor to McNaughton.
Network Rail’s Uma Shanker took control of the Engineering Services business in April as Chief Operating Officer.
Balfour said £30 million of the total originates from a small number of existing contracts, predominantly in the London area: £20 million from a further deterioration in the projects previously highlighted, and £10 million due to issues identified on other contracts.
Additional factors contributing to this further deterioration include design changes, project delays, rework on projects and contractual disputes on a number of projects.
Greater selectivity in a slow market coupled with rigour in estimating and tender margins resulted in a low order intake, a reduction in revenue expectations and therefore a £5 million reduction in forecast profit from new orders in 2014.
uPVC pipes, safety glasses and Spetz app launched
This week has seen a range of new product and service launches for the construction trade.
Vinyl Pipes has launched uPVC Column Pipes, which extend the life of pipes. Column Pipes with a power lock (patent pending) will not only to raise the safety standards but improve the efficiency of Borewell installations. This Lock system, a by-product of the in-house R&D team, is designed to bear load making the pipes stress-free, torque resistant and perfect for handling high pressure water.
Conscious that using the correct glasses could prevent 90% of jobsite injuries, Milwaukee's expanded range (pictured) features anti-scratch and fog free styles, new lens colours and magnification features, complementing its 'cut resistant' gloves.
Arriving on the UK app scene, Spetz is billed as a ‘one-stop shop’ for anyone "panicked by household flooding or electricity failure," as it unites tradespeople with consumers.
Spetz founder and CEO Yossi Nevo said urgent needs come in all forms and it’s unlikely that any household has tried and trusted tradespeople to match every possibility.
"The Spetz app rapidly connects them with a suitable ‘rescue service’ in as little as 30 seconds and that rapid reassurance is completely free - it’s the tradespeople who pay for these job leads. Those start at around £6 a time, but the tradesperson can then go on to make thousands from our automated system funnelling the best and most appropriate work their way.”
Spetz is now three years old operating in Israel, Australia and is now beginning a full UK rollout, after a ‘soft’ launch.