Complex projects offer the best opportunity for profitability, Skanska UK chief executive David Fison claimed today.
The Swedish contractor's UK division today revealed a 45% revenue increase for 2007 compared to the same period for 2006 and Fison said winning complex jobs, big or small, would help continue this growth. 'We aren't interested in growing our sales if we don't grow profit,'said Fison.'Complex commercial buildings and utilities contracts are good examples [of jobs Skanska wants to take on]. When you get alongside regulated industries like utilities, there is real scope for adding value by improving processes.An example has been the firm's National Grid contract to manage the replacement of gas pipelines in North London. which has seen increased productivity and safety among subcontractors.Skanska UK's turnover for the first quarter of 2007 was £283.6M, up from £195.4M in the first quarter of 2006. Profits were also up from £5.5M to £7.4M, although margins across both periods fell from 2.8% to 2.6%. The firm's order book has jumped a massive 91% to £2.3bn, half of which Fison expects to be completed in the next 12 months.Fison attributed at least half of the turnover growth to the acquisition of streetworks contractor McNicholas last year. This doubled Skanska's utilities division's turnover. The rest has come from large private finance initiative contracts such as Barts & The London New Hospital Redevelopment and work on the government's Building Schools for the Future programme, and civils projects such as the extension of the Docklands Light Railway to Stratford.Skanska will focus on organic growth for 2007, said Fison, but it will always be open to the acquisition of small niche businesses.