WET News

6 Leaders 2017 The LeADeRS 2017 AMP6 is ramping up for Balfour Beatty Aer seeing a sluggish start to AMP6, Balfour Beatty says 2017 is proving to be the exact opposite. Turnover £M Balfour Beatty 6,955.0 Amec 5,455.0 Kier Group 4,112.3 Morgan Sindall 2,384.7 Amey 2,230.6 Mace 1,766.7 Skanska UK 1,383.5 Costain 1,263.6 Laing O'Rourke 1,114.3 Interserve Construction 1,006.0 "I'm optimistic because I can see a lot of work, but it depends on confidence more than anything else" " It's got that buzz to the place. It just feels different," says Craig McGilvray, managing director, Gas & Water at Balfour Beatty. McGilvray is commenting on the news that a er a difficult couple of years, the international infrastructure group was back in the black having returned a profit last year. Its underlying pre-tax profit for 2016 was £60M, having shown losses for 2014 and 2015. The turnaround in fortunes is a result of group chief executive Leo Quinn's implementation Build to Last pro- gramme, which has created a more uni- fied UK business with the US business alongside. To cut a long story short, the cause of Balfour Beatty's poor group results was laid firmly at the door of its UK construction business, where there had been a number of problem contracts and most of which were due for opera- tional completion in 2014. Action was swi ly taken to refocus Construction Ser- vices UK and improve efficiency, includ- ing eliminating a layer of the manage- ment structure as part of simplifying the business, and targeting an increase in the average contract size in regional con- struction, with bidding activity being tightly controlled across the division. Speaking about the achievement and the effect the Build to Last programme has add on Balfour Beatty staff, McGil- vray says: "People have got their heads up with a sense of belief as opposed to frustration and disappointment which has been there for a few years now." McGilvray says Balfour Beatty's activi- ties in the water sector were "pretty much where they were expected to be" last year and had picked up following the sluggish start to the new AMP in 2015. The outcome for 2016 is pretty much where Balfour Beatty thought it would be in terms of its activities in the water sec- tor. It had good visibility of the work packages that it was to be engaged with either individually or collectively. "2017 is ramping up and looks like being one of the larger years generally so we've been recruiting, we've been resourcing and preparing the work pack- ages. I think 2016 was on that middle ramp [in the five-year regulatory cycle] and 2017 looks really, really busy. I can't think of anywhere where it's quiet in where we're working," says McGilvray. But he does expect a slight tail-off in 2018. "I can't see it ramping all the way through to the end of the AMP." McGilvray says there is an opportunity to avoid the end-of-AMP6 dip into AMP7 and keep a good base-load of production going. "The possibility is there. Clients are all looking at PR19 planning but will Balfour Beatty Park Square, Newton Chambers Road, Thorncliffe Park, Chapeltown, Sheffield S35 2PH www.balfourbeatty.com Craig McGilvray

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