WET News

LEADERS 2018 31 THE LEADERS 2018 SKANSKA UK Maple Cross House Rickmansworth Tel: 01923 776666 www.skanska.co.uk The UK arm of Swedish- owned contracting firm Skanska has been through a period of transition in the last two years as it seeks to restore its profitability and recover from losses on major projects. Skanska UK's last set of full-year results (for 2016) saw a 19 per cent increase in sales, but a declining profit margin that saw its operating profit almost halved to £22.6 million. The company blamed this on "a challenging business environment" but also said it had "added an additional layer of scrutiny to bolster tender review processes", as well as implementing a system "to better monitor large project performance". The news worsened in July 2017 when it was revealed that the company had made a £33 million loss on its UK projects. In May 2017, its chief executive Mike Putnam announced that he was stepping down aŒer seven All change at Skanska UK years in the job and a 25-year career with the company; he was replaced by Gregor Craig. Skanska UK was subsequently merged into a new Skanska Europe business unit. Then in March 2018, Skanska confirmed it would be restructuring its UK business into two divisions, with the aim of improving its overall service to customers. One division will cover building, facilities management and mechanical and electrical work, while the other concentrating on infrastructure. President and CEO Gregor Craig said: "We are proposing these changes to simplify our structure, making it easier for customers to do business with us. Skanska is a resilient and stable business with a strong balance sheet. We have some excellent and exciting opportunities ahead of us and this sharper focus means we will be in a better position to maximise them." There is also a new face at the head of the company's utilities division, with Peter Walsh – who was formerly operations director for water at Amey – being named as managing director. NORTH MIDLAND CONSTRUCTION Nunn Close The County Estate Huthwaite Sutton-in-Ashfield Tel: 01623 515008 www.northmid.co.uk NM Group goes from strength to strength North Midland Construction Plc (NM Group) has grown rapidly over the last three years, with the 2017 results showing turnover up 16.5 per cent to £291.77 million – building on a similar 15 per cent increase for 2016. The company is optimistic about the future too, saying it has a solid £299 million pipeline of work in place, or 90 per cent of its budgeted revenue for 2018. An operational profit of £1 million was reported, although this incorporated the result of an underperforming legacy contract, without which underlying profit before tax was £8.3 million. With 12 UK offices across the UK, NM Group employs 1,500 people and works in partnership with customers to deliver major built environment and critical national infrastructure projects across the UK, from buildings and highways to large-scale water networks and treatment plants. John Homer, chief executive of NM Group, said: "It's been a record year in terms of turnover and we have built strong foundations for the coming year, with more than 90 per cent of workload for our budgeted turnover for 2018 secured and a healthy pipeline of future opportunities. "We are pleased by the underlying position and in particular the success achieved on driving our cash balance and the quality of the forward order book. "While the outcome of a remaining legacy contract has had an impact on profit levels, we have clear signs of continued growth for the future. Our strategy is focused on realising the potential that exists for us to prosper through careful selection and execution of the work that we take on." NM Group operates nationally with a wholly owned subsidiary Nomenca Limited serving the water sector. It provides design, build, operation and maintenance services covering civil engineering, building, mechanical and electrical engineering and specialist product manufacturing. THE NUMBERS 2012 2013 2014 2015 2016 % change Sales £m 168.9 177.6 193.2 217.6 250.5 15 Gross profit £m 45.8 41.9 51.6 60.1 67.6 13 Operating profit £m 0.8 -5.9 -2.8 0.8 2.2 165 Pre-tax profit £m 0.7 -6.0 -3.0 0.6 2.1 240 Staff 1,007 1,067 1,149 1,183 1,280 8 Net assets £m 18.3 12.0 9.0 10.2 12.7 24 THE RATIOS 2012 2013 2014 2015 2016 % change Return on capital % 3.9 -49.9 -33.1 5.9 16.2 174 Gross margin % 27.1 23.6 26.7 27.6 27.0 -2 Operating margin % 0.5 -3.3 -1.5 0.4 0.9 130 Net margin % 0.4 -3.4 -1.5 0.3 0.8 196 Sales/employee £k 167.8 166.4 168.1 183.9 195.7 6 THE NUMBERS 2012 2013 2014 2015 2016 % change Sales £m 1,092.3 1,120.7 1,260.5 1,383.5 1,650.6 19 Gross profit £m 139.4 121.1 123.5 118.2 112.9 -4 Operating profit £m 41.6 40.0 38.0 40.6 22.6 -44 Pre-tax profit £m 43.4 44.2 41.3 42.1 23.6 -44 Staff 3,823 4,360 5,174 5,312 5,559 5 Net assets £m 258.9 257.7 254.1 277.0 259.7 -6 THE RATIOS 2012 2013 2014 2015 2016 % change Return on capital % 16.8 17.1 16.2 15.2 9.1 -40 Gross margin % 12.8 10.8 9.8 8.5 6.8 -20 Operating margin % 3.8 3.6 3.0 2.9 1.4 -53 Net margin % 4.0 3.9 3.3 3.0 1.4 -53 Sales/employee £k 285.7 257.0 243.6 260.4 296.9 14

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