NEWS HIGHLIGHTS: Fit out specialist fails and Balfour Beatty posts stron result
Fit-out specialist failure contributes to rising insolvencies in construction
Worksmart, the Scotland-based fit-out specialist, is the latest contractor to fail as insolvencies in construction continue to grow. The award-winning firm is being wound up with the loss of all 24 jobs in the face of insurmountable commercial pressure.
Worksmart operated in the commercial interior fit-out and refurbishment sector, a wide range of industrial sectors, and handled contracts for the Scottish government.
Worksmart’s turnover collapsed from around £9m to below £6m during the pandemic.
In the face of fierce competition, rampant inflation and squeezed profit margins the business has continued to suffer. As a result the directors said it was no longer financially sustainable.
Earlier this month The Sunday Times highlighted that firms that cannot wriggle out of contracts where unrecoverable costs were escalating they are finding themselves caught in a cash crunch. Insolvencies in construction in England and Wales are running at 350 a month, compared to about 269 a month in 2019, according to the Insolvency Service.
Balfour Beatty boost half year profits and homes in on more infrastructure work
Profit at construction giant Balfour Beatty more than doubled in the first half to £18 million for the first half of 2022.
Last year the business face costs of more than £20 million from three fixed proce residential contracts in London.
The firm reported a strong financial performance featuring a 42% increase in underlying profit from operations (PFO) at £85 million (2021: £60 million)
There was a 10% increase in order book at £17.7 billion (FY 2021: £16.1 billion); provides clear short- and medium-term visibility. And an increase in average net cash at £811 million for the half year (FY 2021: £671 million)
Leo Quinn, Balfour Beatty Group Chief Executive, said: “With the Group well-positioned to capitalise on the growing infrastructure market, underpinned by its unique capability and balance sheet strength, the upgrade to the full year performance gives the Board further confidence in future capital returns.”
Improving infrastructure gives Manchester platform for growth
New green spaces, improved transport infrastructure and a focus on net zero are at the heart of ambitious plans for Manchester.
The city’s Mayor, Andy Burnham, has outlined his vision for Manchester as an integral part of the Northern economy to Building magazine. Just look at the skyline to see the dramatic change that has taken place this century.
Now ranked alongside Amsterdam and San Francisco as the world’s top-three best cities to live in, there is also a growing list of development opportunities maintaining momentum.
WORTH A LISTEN
Veteran construction commentators Phil Bishop and David Taylor at The Construction Index chew over news from the last couple of weeks.
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