Balfour Beatty says Carillion collapse has been "helpful"

Oliver Gill
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Balfour Beatty was responsible for redeveloping the Olympic Stadium for new tenants West Ham United (Source: Getty)

The boss of Balfour Beatty today said Carillion's spectacular failure has boosted his firm.

Speaking as Balfour this morning revealed a surge in annual profits, Leo Quinn said the collapse of the government's largest strategic supplier was "helpful".

Carillion, formerly Britain's second largest contractor, failed in mid-January under a mountain of bank debt, huge pension deficit and a cash hole of hundreds of millions of pounds. The firm's liquidation is being run by the government's Official Receiver after large accountancy firms concluded there were insufficient funds to run an insolvency.

Industry sources have estimated the bill for managing the fallout of Carillion's failure could stretch into billions of pounds.

However, Quinn told the BBC's Today programme:

Reducing a major competitor from the market that was underpricing us all was helpful.

Read more: This firm's to net £140k investigating overspending on the Olympic Stadium

Carillion contrast

Contrasting with some of Carillion's travails, Balfour said it has exited the Middle East, reduced its pipeline to concentrate on more profitable contracts and placed a greater reliance on cash management.

Shares in Balfour rose over two per cent as stock markets opened this morning. This was despite Balfour profits missing expectations.

“Order book down, profits missed a touch, yet bidding discipline and higher margins are paying off for Balfour Beatty," said ETX Capital senior market analyst Neil Wilson.

"Indeed margins are what matter and today’s results continue the positive trajectory evident in the December trading update and the first half results as Leo Quinn’s Build to Last strategy yields results. But there is still some work to be done in the UK, although management is confident of meeting targets in the second half. The US business, twice the size of the UK division, is already there, as is support services."

Read more: Learning from Carillion? MP inquiries must shed more light than heat

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