Ferrovial’s British development arm has defied the percentages, turning a revenue final yr regardless of failing to safe any new contracts.
The corporate, referred to as Ferrovial Building UK (FCUK), noticed its income climb for the fifth consecutive yr, reaching a record-breaking £536.6 million in 2023. This development stands in stark distinction to the dearth of recent initiatives coming via the door, highlighting the resilience of ongoing contracts.
Whereas FCUK emerged from the crimson with a pre-tax revenue of £5.5 million, the shadow of 2022’s £30.4 million loss nonetheless lingers. That monetary blip stemmed primarily from a provision for anticipated losses on the troubled Silvertown Tunnel undertaking in east London.
“We had a setback final yr on Silvertown, however we’re again on monitor,” assured Karl Goose, FCUK’s managing director, in an interview with Building Information.
Wanting forward, FCUK isn’t shying away from challenges. The report acknowledges the affect of rising prices throughout the trade, with inflation squeezing each labour and supplies. The corporate has, nevertheless, adopted a strategic method to mitigate these dangers.
Adeptly sidestepping fixed-price contracts, FCUK has ensured most of its main initiatives are cost-reimbursable with inflation changes. This intelligent manoeuvre successfully transfers the burden of inflation to the shopper. Moreover, the corporate hedges vital materials purchases, additional fortifying its monetary place.
FCUK’s money reserves dipped barely from £213 million to £189 million final yr, partly because of the Silvertown provision. Nonetheless, the corporate maintains this discount hasn’t impacted its provide chain funds. Moreover, FCUK boasts a wholesome monetary standing, with no short-term or long-term financial institution loans on its books.
The corporate’s workforce has seen a minor contraction, with the common month-to-month headcount falling from 589 in 2022 to 566 in 2023.
Whereas large-scale infrastructure initiatives appear to be on maintain, with delays plaguing the Decrease Thames Crossing and the cancellation of HS2 part two, FCUK is setting its sights on new horizons. The corporate is actively pursuing smaller ventures, together with the £107 million Norwich Western Hyperlink highway scheme.
Past conventional development, FCUK is exploring thrilling new avenues. The corporate sees potential within the vitality, water, and sophisticated constructing sectors, with information centres being a selected space of curiosity.
Leveraging the experience of its mum or dad firm, Ferrovial, FCUK is poised to introduce its water subsidiary, Cadagua, to the UK market. Equally, the corporate goals to ascertain Ferrovial’s vitality and energy transmission enterprise as a brand new participant within the British market.
With a strategic eye on the long run and a dedication to monetary prudence, Ferrovial’s UK arm seems to be well-positioned to climate the present storm and capitalize on upcoming alternatives.
