A massive increase in unpaid bills in Dubai has hit Halcrow’s 2008 results hard.
Debts owed to the consultant increased significantly - from £818,000 in 2007 to a staggering £29.29M in 2008. “In the latter part of the year, some projects were postponed and customers took longer to pay us so working capital increased significantly,” says the company’s annual report.
Turnover increased by 20% to £467.3M from £388.1M in 2007. Underlying profit for 2008 grew but “the board deemed it appropriate to make provisions against our exposure with some customers, and on some projects, because of the dramatic changes that have occurred in some of our markets,said the firm.
“This has significantly reduced reported profit to £12.4M, 48% down on the £23.8M reported for 2007,” said a statement from chief executive Peter Gammie.
Chairman Tony Pryor said: “We know from experience that the sectors in which we operate are often hardest hit at the tail end of a recession. It is inevitable that any cuts in public spending and funding for private sector work will impact us over the next few years.”
However, the company has been resilient in the UK, with: “turnover up 11% to £231M. We secured two more contracts to act as managing agent for the Highways Agency making Halcrow and its joint business partners, Colas and Costain, the lead contractor in England. This gives us 32% of the UK highways business in all.”