Balfour Beatty lost more than £300m last year and Leo Quinn was brought in to turn the business around. He set about implementing his Build to Last transformation programme. Immediate results were never expected. In the first half of 2015 Balfour Beatty lost a further £150m. Turnaround takes time.
In a trading update today, he said that the Build to Last project, started in February, “continues to gain traction, as new standardised processes and controls are rolled out across the businesses”.
With the order book broadly stable in the second half, the board expects the company to be net cash positive at the year-end.
Balfour Beatty has also agreed a new £400m syndicated revolving credit facility, refinancing the existing facilities that had been due to expire in 2016. The size of the credit facility has been reduced, consistent with the ongoing capital requirements and the underlying strength of the balance sheet. The new facility extends to 2018, with the option for two additional one-year extensions to 2020.
Mr Quinn said: "As we near the end of Year One of the Build to Last programme, we continue to work through the challenges of the legacy problems. However, we are putting in place the systems and processes that should transform Balfour Beatty into a stronger business, as demonstrated by our successful refinancing.
"Over the medium term, I remain convinced that these actions will drive superior performance, to the benefit of our customers, employees and shareholders."