PRICING

Construction giant Balfour Beatty has posted tripled underlying pre-tax profits for 2017, as its boss said rival Carillion’s collapse had removed “a major competitor from the market that was underpricing us all”.

Balfour Beatty, whose Scottish works include the Perth Transport Futures Project and the redevelopment of Dundee rail station, said yesterday that profits rose to £165 million in 2017 from £62m a year earlier.

Leo Quinn, Balfour’s chief executive, said: “Companies are starting to recover from what effectively was very low pricing in 2013 and 2014.”

Quinn said the company had narrowly avoided the fate of Carillion through reforming its business and making it less complex since he became chief executive in 2015.

“We had our own near-death experience three years ago – eight profit warnings, £600m cash outflow in nine months from the company,” he said. “These results today demonstrate an amazing transformation and turnaround.”

Balfour’s statutory pre-tax profits came in at £117m, up

0 A Balfour Beatty steel beam in the Perth Transport Futures project

LEO QUINN, CEO from just £10m the previous year.

Quinn said over the past three years the firm had upgraded its leadership and simplified its structure, selling itsmiddleeasternandindonesian operations.

In its results, the group took a one-off loss of £44m on the Aberdeen Western Peripheral Route project contract as a result of Carillion’s liquidation.

Balfour and its remaining joint venture (j/v) partner on the project, Galliford Try, are obliged to complete work on the 58-kilometre dual carriageway.

Balfour has taken on 150 of Carillion’s employees who had worked with the firm on j/v projects.

Quinn blamed Carillion’s implosion on a failure of leadership. He said: “If you are driving the car and not looking at the gauges in front of you, and not understanding what’s going on with your petrol and the speedometer, you’re not actually doing the job you are paid to do.”

“Companies are starting to recover from what effectively was very low pricing in 2013 and 2014.”