Skanska profit hit by problem jobs

Pre-tax profit in the year to 31 December 2007 was 7%, down from £35.5m in 2006 to £32.9m, despite the fact that turnover rose 44% to £1.3bn.

David Fison, the chief executive of Skanska UK, said profit would have risen “in line with sales” had it not been hit by problems on the unnamed projects.

He said: “Without a shadow of a doubt we will learn the lessons of it, and design management and risk management will form part of that – we are working on that as we speak. We’ve got to turn problems into experience.”

The picture was brighter across the whole of the Swedish group, where turnover rose from £9.3bn in 2006 to £10.3bn in 2007. Pre-tax profit was up from £270m to £326m.

Mike Pinkney, an analyst at Citigroup, said: “The UK was the one black spot. When there are cost overruns on a PFI project there is nowhere to hide because you can’t pass the cost on.”

Stuart Graham, Skanska’s group chief executive, said he was confident the costs of the problems in the UK had been fully accounted for. He added: “We’ve got to put that right in the future.”

Last week it was announced that Johan Karlstrom, head of the group’s US construction business, would replace Graham as chief executive.

Graham will remain at Skanska in the role of chairman of the group’s construction business units in the US and as an adviser to the chief executive and Skanska board.

According to tables compiled for Building, Skanska won £1.47bn in 2007, the seventh highest in Britain .

Skanska recently won the contract to build the £242m Heron Tower in the capital and is building the £150m Walbrook mixed-use scheme in the City of London.