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NCE Live News Updates Tuesday 18 February: Kier boss Sheffield steps down; Profits slump at Morgan Sindall

The news this morning came from the contracting business world with the news that Kier boos Paul Sheffield is to step down while over at Morgan Sindall profits have been hit hard. So far this afternoon there is the usual notice from the Environment Agency about flood threats.

5.10pm: A three-runway hub airport is vital to ensuring the UK’s long haul connectivity, according to research by the Independent Transport Commission.

The Optimal Size of a UK Hub report broadly agrees with the interim findings of the Davies Commission, while arguing that a new runway should be introduced at a hub, rather than point to point, airport.

“For the foreseeable future long-haul aviation remains likely to rely heavily on the hub and spoke business model,” the report concludes. “So hub airports will remain at the heart of global aviation connectivity.”

“A three-runway hub airport is likely to be sufficient for the next 20 plus years, and could mean up to 70 more destinations; in planning for the longer term, the Airports Commission should also address what might happen if it becomes clear that further capacity is required,” it added.


12.45pm: The latest update from the Environment Agency suggests that river levels will remain high for several more days, particularly along the Thames and Severn.

Levels are starting to gradually fall, it said and severe flood warnings for the Thames were downgraded yesterday.

On the Somerset Levels flooding continues, with two severe flood warnings still in force.

Groundwater flooding remains a concern in Berkshire, Hampshire, Surrey, Sussex, Kent and parts of London. There is also a risk of coastal flooding for North Cornwall and North Devon, and at Chiswell and Preston Beach in Dorset from Thursday through to Saturday.

Since 29 January, around 1,700 properties have flooded, while over 207,000 have been defended from flooding.


10.20am: Scottish Water has announced its water and waste water infrastructure alliance partners for the 2015/21 investment period.

This first stage involved appointing two partners – one for water and one for wastewater – to deliver upgrades, maintenance and new infrastructure assets.

Caledonia Water Alliance, a partnership of Morrison Utility Services and Aecom, will deliver around £360M of investment over the six years.

BBV Alliance, a partnership of Black & Veatch and Byzak (part of Amey), will be wastewater infrastructure alliance partner delivering around £340M of work.

An element of the alliances’ programme of work will be self-delivered with the remainder through contract partners.

The alliances are now working with Scottish Water to procure tier one suppliers.

“Caledonia Water Alliance and BBV Alliance have committed to employing apprentices and graduates through the programme,” said Scottish Water director of asset management Geoff Aitkenhead.

Caledonia Alliance has committed to 20 modern apprentices and seven graduates, and BBV Alliance has committed to 30 apprentices and 18 graduates.

In addition to the tier one procurement, Scottish Water is also holding market days in Scotland to identify delivery partners to support the water and wastewater alliances and operations teams. It said the market days would help identify contractors that could benefit from its capital maintenance programme estimated to be worth around £500M over the six years.


10.10am: Contractor Morgan Sindall saw profits plummet by 34% last year, according to its full year results for the period ending 31 December 2013.

Proft before tax came in at £31.3M against £47.1M for the previous year.

“2013 has seen challenging conditions predominate across most of our markets, with competitive pressures impacting on margins and profitability,” said chief executive John Morgan. “Notwithstanding this, the positive operating cash flow generated by the business has allowed us to make further investment in strategic assets, key skills and resources, which positions the group well to benefit from future growth opportunities.”

There were “some signs of increased activity and market confidence” in the second half of the year and forward orders were up 8%, the firm said.

Margins remained under pressure, mainly in the construction and infrastructure and affordable housing divisions, whichthe contractor said was due to high competition and increased input costs

“Looking ahead to 2014, although there are signs of improving conditions in some of our markets, it is anticipated that upward pressure on supply chain costs and skills availability will provide additional management challenges,” added Morgan. “Against this backdrop, we remain confident that our robust order book and on-going disciplined approach to contract selectivity will support the delivery of growth in this year and beyond.”


10am: The boss of contractor Kier, Paul Sheffield, has decided to step down.

Sheffield will leave on 30 June to be replaced by group finance director Haydn Mursell.

Sheffield said: “Since I joined Kier in 1983, the group has grown enormously, both in scale and the services it offers. I’m very proud of what we have accomplished, but feel it is now the right time to transition the leadership of the group. I know that Haydn will do an excellent job leading Kier in the next phase of its development and I wish him every success in his new role.”

Kier chairman Paul White said: “I would like to express our thanks to Paul for his long- serving commitment to Kier. He joined Kier in 1983 and his contribution over 30 years with the group has been considerable, most recently guiding the acquisition and integration of May Gurney. After a handover period, Paul will leave with our very best wishes for the future.”

“Haydn has done an excellent job as finance director since joining the Group in 2010 and has demonstrated that he is the right person to take over from Paul. We are looking forward to working with Haydn.”

The firm added that trading remained in line with the board’s expectations with interim results due on 27 February.

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