Carillion collapse costs Britain’s biggest builder £44m
Balfour Beatty, Britain’s biggest constructor, has been forced to make a £44m loss provision within its accounts as a result of the liquidation of Carillion.
The figure came to light when the company announced its annual results.
It said: “Carillion was one of the group’s joint operations partners in the Aberdeen Western Peripheral Route (AWPR) project.
“As a result of Carillion’s liquidation, the group and its remaining joint operations partner on the project, Galliford Try, are jointly liable to deliver Carillion’s remaining obligations on this contract in addition to each partner’s existing 33% share.
“As a result, the group has recognised a one-off non-underlying loss provision of £44m in 2017 which reflects the group’s additional loss on the contract as a result of Carillion’s liquidation. The contract is expected to complete in the summer of
Galliford Try revealed last month that it had had to make its own provision of £25m as a result of Carillion’s collapse.
Balfour Beatty has also assumed responsibility for Carillion’s share of the A14 road project in Cambridge.
On a more positive note, Balfour Beatty also revealed it had recruited more than 150 of Carillion’s former workers. These people had worked alongside Balfour Beatty staff on the Aberdeen Western Peripheral Route (AWPR), A14 and Manchester Smart Motorway joint ventures.
“Their significant experience will bolster Balfour Beatty’s long-term capacity at a time of growing market demand,” it said.
Commenting on the firm’s results, Balfour Beatty’s chief executive Leo Quinn told the BBC that it was likely to benefit in the long term as a result of Carillion’s demise.
He said: “Reducing a major competitor from the market that was underpricing us all was helpful.”
The comments are somewhat ironic because as recently as 2014, the Wolverhampton-based group had been bidding to acquire Balfour Beatty.
It had tabled a £3bn offer but eventually withdrew because of Balfour’s Beatty’s reluctance to accept.
Balfour Beatty’s full year results showed a sharp rise in pre-tax profits to £117m for 2017, up from £10m the previous year. However, annual revenue was flat at £6.9bn.
The company said it was now looking to progress, underpinned by a strong balance sheet.