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Different approach by Skanska UK delivers success at Half Year

Press release 27/07/2006 00:00 CET

Skanska UK Plc today announces its results for the half year of 2006. Revenue at £424 million for the first six months of 2006 is a 27 percent improvement on that at the same period in 2005. Operating Income at £19.5 million represents significant improvement on previous years.

Order Backlog at £2.2 billion across the company’s three business streams of Civil Engineering & Specialists, PFI/PPP and Construction, represents a 95 percent increase compared to that at half year 2005.

As Skanska entered into the second half of 2006, success continued with the company reaching Financial Close on the UK’s first Building Schools for the Future programme in Bristol, followed just ten days later by the Financial Close of Skanska’s first Scottish PPP Schools Scheme for Midlothian Council.

David Fison, Chief Executive, Skanska UK Plc said, “The performance and behaviours of our people enable us to offer something different to our clients which meet their needs. Our numbers show this and I am delighted with today’s results”.

Operational highlights for Skanska UK Plc during the first six months of 2006:

 Skanska continues to drive its No Harm philosophy to achieve its goal of zero accidents and during the first half of 2006, saw its accident incident rate decrease by 10 per cent. The emphasis remains on prevention of accidents, with much effort put into its partnership with Mencap and Enable, [email protected], to improve the reporting of all unsafe conditions and actions.

For every near miss reported, Skanska donates a minimum of £1 to Mencap and Enable and for every accident eliminated as a result, Skanska will donate a minimum of £500. In March 2006, Mencap and Enable received £25,000 from Skanska due to the success of the near miss reporting and accident elimination at Skanska during 2005.

 Skanska’s performance in health and safety also received significant external praise during the first half of 2006. The company received the Best Major Contractor’s Safety Initiative Award from Building magazine for the second year running and received a Safety Initiative Award from H&V News for the [email protected] programme.

 Skanska’s commitment to sustainability was also praised in the first half of the year, with its project team undertaking the redevelopment of the Coventry New Hospitals PFI scheme winning a regional RICS award for outstanding contribution to sustainable construction and development, in particular its commitment to environmental excellence.

 2006 has also seen an industry first with the launch of the Skanska Carbon Neutral Air Programme. This is a commitment the company has made to help give something back to the environment by offsetting carbon emissions from air travel, and has formed a partnership with Cowdray Park in Midhurst in West Sussex.

Through the partnership, to date Skanska has supported the planting of over 5000 trees on land specifically earmarked for this purpose and has committed to a further 5000 trees during the 2006/07 season. It is expected that during their lifecycle, Skanska’s trees will absorb at least the amount of carbon produced by the company’s air travel.

Civil Engineering & Specialist Business

 In Scotland, Skanska’s team successfully replaced the 3500 tonne Harthope Viaduct on the West Coast Mainline. Completed during the Easter weekend blockade, the team demolished the previous bridge and slid the new one into place, handing back to Network Rail one hour ahead of schedule.

 In Hertfordshire, work began on the M1 junctions 6a-10 widening programme, being carried out in joint venture with Balfour Beatty. The scheme will see the M1 widened to four lanes in each direction, helping ease congestion and improve safety between the M25 and Luton.

 In Cumbria, work began on the A66 Temple Sowerby bypass project, and younger members of the local community were invited to help officiate at the ground breaking adjacent to the site . This £23 million project will improve safety for the residents of Temple Sowerby and ease traffic flow through the village.

 During the first half of 2006, Skanska has completed five schemes under its AMP 4 Alliance with Anglian Water with a further six schemes currently underway.

 In the North of England and Scotland, following its previous successful performance, Skanska is undertaking the first four schemes awarded by Network Rail under its new FTN contract.

 Skanska’s specialist businesses continue to perform well, with consistent streams of new work coming through.

All Skanska UK’s specialist operations have received RoSPA Gold Awards for their commitment to health and safety. Skanska’s steel decking specialist, Richard Lees Steel Decking also received the prestigious International Safety Award from the British Safety Council.

Utilities

 Skanska, as part of the North London Gas Alliance, entered its second year of working with National Grid on the £400 million contract to replace 3200km of gas mains in North London. The team also received industry praise for its work, winning the Innovation in Management Processes category at the 2006 Quality in Construction Awards.

Construction

 Skanska was awarded a £75 million contract to design and construct a new office building at One Kingdom Street, part of the PaddingtonCentral development in West London. Skanska combined its skills in design, building, building services, piling, steel decking, ceilings and decorative plasterwork to offer a ‘Skanska’ solution for client Development Securities.

 Skanska’s team at the refurbishment of 50 Queen Anne’s Gate for Land Securities received an “Excellent” rating in its BREEAM assessment along with an Environmental Performance Index of 10.

 Skanska has received an order from The Heron Tower Property Unit Trust for the first phase of a contract to construct Heron Tower. When complete, Heron Tower will be the tallest building in the City of London. Work is expected to begin on site in 2007.

 As the results went to press, Skanska also completed Palestra, the South Bank’s latest landmark building.

PFI/PPP

 In London, Skanska, in consortium with its partners Innisfree and Equion, achieved Financial Close on the Barts and The London New Hospitals programme. At £1 billion, it is the largest PFI healthcare scheme ever to close in the UK and will see the redevelopment of St Bartholomew’s in the City and the Royal London in Whitechapel.

 In Nottinghamshire, Skanska, in consortium with Innisfree formally broke ground at its Central Nottinghamshire Hospitals PFI Scheme. The £300 million project will provide new acute services at Kings Mill Hospital, Mansfield Community Hospital and backlog maintenance works at Newark General Hospital. In the same quarter, the team also handed over the new chapel to the NHS Trust.

 In Derby, Skanska Innisfree handed over the first completed phase of the £333 million Derby PFI Hospital scheme, for Derby Hospitals NHS Foundation Trust. The Kings Treatment Centre, the new Education Building and approximately half of the 95,000m2 Acute Hospital building was handed over to the client on schedule.

 In Coventry, the 15th phase of the New Hospitals PFI Scheme was handed over on schedule in May, just one week after the handover at Derby. That meant that within two weeks, Skanska handed over over 6,000 new rooms to the NHS. The Coventry scheme also won a National Gold Award from the Considerate Constructors’ Scheme for the second consecutive year.

 In Suffolk, Skanska completed work on a new £82 million barracks and training complex for Defence Estates. Rock Barracks in Woodbridge, has now become home to 23 Engineer Regiment, part of 16 Air Assault Brigade. The project included the provision of accommodation for its 636 personnel, training, storage and leisure facilities on a 69ha site within an Area of Outstanding Natural Beauty and surrounded by Sites of Special Scientific Interest.

ENDS