Vinci's UK building business falls £34m in the red

Vinci’s UK building arm slumped to a £33.8m pre-tax loss in 2013, dragging the firm’s overall UK business to a 48% fall in pre-tax profit in the year to 31 December.

In accounts filed at Companies House, Vinci said a “difficult trading environment” led to “significant trading losses” for its UK building business and it will “continue to reduce overheads and concentrate on quality initiatives” in an effort to become profitable.

The firm’s £33.8m UK building loss in 2013 compared to a £6.6m pre-tax loss the previous year, while the building division’s revenue increased 3% to £618.6m, up from £599.2m.

Vinci’s overall UK group business – which also includes civil engineer Taylor Woodrow and facilities management and investments divisions – reported a £7.1m pre-tax profit, down from £13.8m the previous year, while revenue grew 13% to £1.3bn, up from £1.1bn.

Vinci’s group profit was boosted by a £23.3m pre-tax profit from its investments division – which holds PFI assets – up from £3m the previous year.

The group’s headcount declined by 297 over the year to 3,764, down from 4,061.

Vinci said it expects its building business in the south of England to increase in 2014, particularly in London.

The firm said: “The market in London is forecast for growth as private residential apartment schemes appear at an increasing rate and commercial, health and mixed use schemes are similarly strong.

“We have also seen an upturn of activity at Heathrow and Gatwick airports.”

Major projects completed by Vinci’s contracting arm in 2013 included a new visitor centre at Stonehenge (pictured) and the headquarters for dance company Rambert on London’s South Bank.

The firm’s Taylor Woodrow civil engineering arm posted a 12% decline in pre-tax profit to £10.4m, down from £11.8m, while the division’s revenue increased 57% to £379.2m, up from £242.2m.

Vinci said Taylor Woodrow benefitted from additional work in the energy-to-waste sector and on Crossrail, but warned “extreme weather events” since the start of 2014 will impact on its Nottingham City tram contract, resulting in “delays and additional costs being incurred in 2014”.

Vinci added: “The group will seek to recover these delays and costs but the final outcome remains uncertain at this time.”

Vinci’s facilities arm posted a 4% decline in pre-tax profit to £6.7m, down from £7m, while revenue fell 7% to £228.3m, down from £245.4m.

Vinci’s UK group also delivers jobs in the Middle East, and this team grew to 50 over the year and amassed a £42m order book.