Construction Figures Are In
Some of the largest companies in the UK made a loss this year with Kier, Keller and Laing O’Rourke all reporting an annual loss.
The Figures are in……..
The financial results from UK contractors are in, and it’s a mixed bag. The parent company of Interserve, Britain’s third largest contractor, went into administration this month after struggling on for more than a year, with the rest of the group being immediately sold to a newly incorporated company owned by lenders. The fact that the company slowly collapsed after issuing its first profit warnings in 2017 at least allowed affected businesses to prepare for, and minimise the fallout, unlike the aftermath of the sudden implosion of Carillion last year.
Further reported losses
Some of the largest companies in the UK made a loss this year with Kier, Keller and Laing O’Rourke all reporting an annual loss. Not all of these financial troubles come from construction work in the UK, with Keller restructuring its overseas operations in the face of a series problem jobs across the territories it operates in, Laing O’Rourke having to write off £26m on a Canadian hospital contract and Kier making a net loss on the disposal of its Australian Highways business.
It’s not all bad news however, Galliford Try, Morgan Sindall and Costain all reporting good figures, while the country’s largest contractor, Balfour Beatty has turned around the losses it was making a few years ago into pre-tax profits. The UK has a £600bn infrastructure pipeline and these companies have put themselves into a good position to reap the rewards.
The past year has seen industry gearing up for Brexit, but this does not seem to be the issue that is most pressing for these firms. The availability of European labour is not an issue that will derail the industry, the most pressing issues are the same as they have always been, keeping problems jobs out and margins up. Brexit, if and when it does happen, will undoubtedly affect the industry, but nobody really knows how and so the firms continue to focus on what they can to put themselves in the best position possible to survive the potential upheaval ahead.
Suppliers of big firms
What does all of this mean for suppliers and subcontractors to the big firms? It means that while there are still levels of uncertainty within the industry, these smaller companies have to take proactive measures to protect themselves moving forward. Cash flow is key to the stability and survival of any company, regardless of size, and ensuring you have robust systems in place is one way to protect this.
At Daniels Silverman we offer a white label credit control service to improve your cashflow before problems arise. We act proactively on behalf of your company by contacting your customers and reminding them of any missed payments. We are friendly, polite and professional and understand that your clients are your most valuable resource.
Our service has a high level of success and is valued by both our customers and their clients, who have an open line of communication to resolve any queries they may have.
Regular and robust credit checks are part of our credit management routine for new customers, those seeking an increase in credit limits as well as those who are regularly late payers. This service takes the stress out of managing your invoice payments and cash flow.
We charge a flat monthly fee for these services, as opposed to commission, allowing you to be in complete control of what you spend based on the number of invoices to be collected. We provide a same day service, so you know exactly where you are up to and allowing you to keep you accounts.
The future in construction is certainly not all doom and gloom and the infrastructure pipeline offers scope for this sector to do very well. However, with Carillion and Interserve showing us that no company is too large to fail, prudence and a proactive stance is advised in order to stay afloat in the uncertain waters ahead.