Balfour Beatty’s (BAFBF) CEO Leo Quinn on Q4 2015 Results – Earnings Call Transcript | Seeking Alpha

BB logoWelcome, everybody, to Balfour Beatty’s final yearend results for 2015. I’m Leo Quinn, the Chief Executive, and I’m joined today by Philip Harrison, my Finance Director. We’ll start off with a brief introduction and summary from myself. That will be followed by Phil, and he’ll give some detailed financials, and then I’ll give you an update on our Build to Last progress. So, let me start with a few observations. I started with Balfour Beatty 12 months ago and at that time I announced what effectively was our 24-month self-help plan, and that was a very, very deliberate decision, both in terms of the timing and the things that we would have to do. I think what’s key about self-help is that we were going to actually manage this transformation using our own assets and resources. We weren’t going to go outside to the market and look for help, which would mean an equity call or some other form of cash raising. So the last 12 months have been very, very challenging, and we’ve turned in what I think is a very strong performance. There’s no doubt that — I don’t want anybody to forget that we’re 12 months into a 24-month plan; therefore we’re halfway through, if anybody can’t do the maths on that. So we still have the other half to go. So I don’t want to be declaring victory in any way, shape, form or size. The first 12 months was a steep slope. My experience is that the second 12 months is always a steeper slope, so we have a lot to do. I think we’ve made rapid and meaningful progress in that period of time. We’ve effectively simplified a lot of the organization, and there’s still more to go. We’ve upgraded leadership, something that we will continue to relentlessly do in the Company. Our governance and controls have improved dramatically, and we’re starting to see a culture change based around measurement and transparency. So, in that count, good progress, but still a long ways to go. We’ve seen our order book start to stabilize and we still have one of the strongest sector balance sheets. In terms of our orders, we’ve taken a good, hard look at them, and in areas where we’ve had the legacy projects and the loss-making contracts, we’ve looked to reduce our exposure in those areas. And we’ve also made meaningful progress in respect of some of our contracts which effectively were just loss-making, and we’ve negotiated an exit from many of those.

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