Firm admits ‘errors in forecasting’ meant previous figure had to be ripped up

Skanska has been forced to adjust the amount of money it said it made in 2022 after admitting it had underestimated the cost of completing several contracts by £30m.

In a note accompanying its 2023 accounts, the firm’s UK construction business said its restated pre-tax profit for 2022 was now £24.5m after it said the amount needed to finish off jobs had risen by £30.5m.

It added: “Further investigation revealed various underlying causes of the estimated total cost increases, including errors in forecasting, the discovery of previously unidentified risks which the group should have been aware of and the misinterpretation of contract terms and obligations and therefore related costs.

Skanska

Skanska said the cost of completing several jobs was £30m more than it previously thought

“The group determined that a number of these underlying causes existed at the previous reporting date and would have resulted in the recognition of different contract revenues and costs in the prior year if the information that should have been reasonably known was known.”

The revelation came as the firm said its 2023 numbers showed a pre-tax profit of £27.4m – a rise of 12% on 2022’s restated figure – with turnover flat at £1.3bn.

It said that year-end cash and cash equivalents was £396m, down from £441.5m, which it said was mainly down to a dividend payment made to its parent.

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