The UK arm of French builder Vinci has increased its profit almost fivefold – thanks to the sale of a parcel of land – despite its civil engineering business Taylor Woodrow making a loss.
Pretax profit for 2017 increased to £22.4m from £4.6m, though turnover was down to £870.1m from £948.8m.
Taylor Woodrow continues to be plagued by problem contracts, including extensions to the Nottingham tram system (pictured). Turnover was reduced to £205m from £269m, and its pretax loss grew to £17.7m.
Bruno Dupety, Vinci chairman, said: "Although many of our commercial challenges have been closed during 2017, the number of projects projecting an end loss has increased from two at the end of 2016 to three. One of the three can be converted back to profitability, however the same two as at the end of 2016 will remain loss-making until their completion."
In results posted at Companies House Vinci said the sale of a parcel of land on the New Covent Garden redevelopment site in London’s Nine Elms netted a "significant dividend" to Vinci, boosting the group’s net profit in 2017.
At Vinci’s building division, turnover grew 3.7%, from £407m in 2016 to £422m and pretax profit was £6.5m. Dupety said each of its six building regions traded profitably "for the first time in a number of years".
Overall in the building division, however, pre-tax profit slipped to £6.5m in 2017 from £7.5m previously.
Additionally, Dupety warned that contract awards in 2017 "tailed off towards the end of the year, as we saw a tightening of the market with fewer opportunities and greater competition".
Vinci Facilities reported lower turnover of £224m, down from £238m, due to "more selective tendering", though operating profit of £5.5m represented a margin of 2.5%, up from 1.5% a year ago.
The group’s development and PFI business contributed £34.8m of pretax profit to the group.
Dupety said: "2017 was a fair year for the group, with a good level of activity and a profit rate of 2.6%. Net positive cash has massively improved from last year, to a year-end position of +£210m. We enter 2018 with an order book of £925m which makes us confident for our performance next year and going forward."
Image: A Nottingham tram on Market Street. The project to extend the tram system has cost Vinci’s Taylor Woodrow dearly (Elliott Brown/Wikimedia Commons)