Bovis bounces back with healthy UK profits

Strong contributions from Bovis' London 2012 Athlete's Village project and BP Alliance contract helped the construction arm of Lend Lease bounce back with the first set of healthy UK profits for three years.

Worldwide Bovis raised pre-tax profits 25% to ВЈ126.7m despite still being adversely affected by the workout of UK projects where loss provisions were taken in previous years.

Strong contributions from the Olympic Village job, Peel Media City mixed use project in Salford and the central St Giles office development in London saw pre-tax profits at the European division of Bovis jump from ВЈ17.3m to ВЈ31.4m on a steady turnover of ВЈ1.7bn.

Bovis Lend Lease EBITDA profit by regionADVERTISEMENT

 

Region June 09  June 08 Europe ВЈ31.4m ВЈ17.3m Asia Pacific ВЈ68.6m ВЈ48.9m Americas ВЈ26.4m ВЈ35.2m

Turnover by region

Region  June 09 June 08 Europe ВЈ1.7bn

 ВЈ1.8bn

 Asia Pacific ВЈ1.5bn ВЈ1.4bn Americas ВЈ3.0bn ВЈ3.0bn

Bovis's global construction and project management operations now represent a key part of the Lend Lease business, accounting for 40% of overall profits.

Big overhead cuts before Christmas and strong orders mainly for education projects saw Bovis raise gross margins from 4.7% to 5.2%

Turnover remained  flat at ВЈ6.3bn in the year to June 2009. But Bovis said it had a strong project pipeline which would support long term earnings potential, as it beefs up its infrastructure project work backed by government stimulus spending.

Bovis' project management contract to maintain BP service stations across will run to 2014 with a total construction value of ВЈ800m. The other two big projects include the management contract to build the ВЈ450m Peel Media City at Salford Quays, due to complete in in two years and the MOD slam project running to 2013.

Profits in the US were hit by a fire at its Deutsche Bank job in New York.

Murray Coleman, ceo of Bovis Lend Lease, picked up ВЈ600,000 in salary, bonuses and allowances as a result of the upturn in Bovis' fortunes.

PFI investments operating as a separate division turned over ВЈ760m, creating an operating profit of ВЈ35m.

Overall net operating profit at the parent property development group Lend Lease fell 30% to ВЈ155m. After property write downs this translated to a stautory loss of ВЈ329m. Lend Lease booked a net gain of ВЈ16m as a result of closing the Bovis pension scheme.

Steve McCann, Lend Lease group ceo said: "Lend Leas has performed well despite very challenging market conditions. However Lend Lease is not a distressed seller of assets and we will only sell assets where we believe it will optimise longer term shareholder value."

 

 

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