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Tuesday, 10 December

Vinci Facilities - Miniscule Profit Calls for Microscope

According to the Construction Enquirer (CE) this morning, Vinci PLC has reported massive losses for its civil engineering and construction arms for the second year running (2013 and 2014 accounts). The previous year had also seen losses of a smaller magnitude. The biggest loss comes from civils - £165 million with much coming from being involved in the Nottingham Tram project debacle while construction shows a £50 million loss.

However, hidden in the figures is the woeful performance of Vinci Facilities.

According to CE figures, the previous year's accounts showed Vinci FM's turnover at £228 million and profit at £6.7 million...not a great margin but a profit none-the-less. 2014's accounts show turnover down by 15 million to £213 million and profit down to just a paltry £0.22m.

Last year, it was suggested that such poor figures could see Vinci FM under the microscope from a main construction arm that was embarrassed by its own performance and could not afford to be dragged further down by a low profit, low margin FM division.

 

What now?

Last year, (October when the accounts were confirmed rather than provisional) the Vinci Construction MD at the time Andrew Ridley-Barker was deposed by hitman Bruno Dupety who flew in from the French parent company to take control of the whole shebang. Commercial Director Paul Tuplin also went. Chief Executive John Stanion was paid over half-a-million for 'loss of status'.

In October, Dupety told senior staff at FM they might be at risk of redundancy and would have to justify their roles in the business - effectively re-applying for their jobs. The group doesn't convert many projects into ongoing FM contracts - and this year FM has lost work.

In October, ThisWeekinFM wrote that poor returns from many major construction companies has seen shareholders call for a return to core business - including getting out of FM despite the natural symbiosis of the two disciplines. Sherpherd Constuction is still in the process of selling its (successful) FM company to Wates to help with its own deficits - who might try to follow suit?

 

The meek shall inherit a headache

Meanwhile Bruno Dupety has gone from bull to supplicant saying: " “The handover of the tram system is expected in the summer, following testing and commissioning. There will be complex discussions between Vinci, the client and joint venture partner in order to reach financial settlement on this contract.”

Picture: Bruno Dupety, Chairman and Chief Executive Officer of Vinci PLC

Article written by Brian Shillibeer

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