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Skanska UK - consistent performance and good margins at third quarter

Press release 03/11/2005 00:00 CET

Skanska UK Plc today announces its results for the third quarter 2005 ending September 30th.

At £6 million, the profits represent three per cent of revenue showing consistent performance throughout the year and an improved margin on that at the same period in 2004. Order backlog at £1.2 billion does not include those projects at preferred bidder stage. The financial close of these preferred bidder schemes during the last quarter, will see Skanska UK’s order book double at the end of 2005 compared to that at the end of 2004.

David Fison, Chief Executive, Skanska UK Plc said, “The year is running to plan. We are continuing to focus on strengthening our people, processes and behaviours ahead of the workload we anticipate will come through in the final quarter of 2005. We are developing a mindset and performance to exceed our clients’ expectations and continue delivering consistent performance for our shareholders. I expect a good year-end and a great position going into 2006”


Highlights for Skanska UK Plc during the nine-months to September 30th 2005: -

PFI/PPP

In Scotland, Skanska in consortium with The PFI Infrastructure Company plc (PFI Co) was selected as Preferred Bidder on a 30-year £70 million scheme to design, construct, finance and operate eight new schools for Midlothian Council.

Also in Scotland, Skanska continues its successful working relationship with the Scottish Prison Service, securing a £55 million contract under its framework agreement to design and construct a new house block and Health Centre at HMP Glenochil and a new house block, segregation unit and regimes facility at HMYOI Polmont.

In Suffolk, Skanska’s £82 million scheme at RAF Woodbridge, hosted the launch of Constructing Excellence as the project – the largest stand-alone Prime Contract under development for Defence Estates, was named a Constructing Excellence demonstration project.

In Derby, Skanska topped out the first major phase of its £333 million PFI redevelopment of Derby City General Hospital – Kings Treatment Centre, a new clinical facility and the first half of the main acute building for the Derby Hospitals NHS Foundation Trust. Work now continues towards the completion of the main acute hospital building, due for handover in Spring 2006.

Skanska continues to receive significant external praise for its work in the PFI/PPP sector winning, for the second year running, PFI/PPP Contractor of the Year from Building magazine, Best Private Sector Consortium at the PublicPrivateFinance Awards, for the second consecutive year and also at the PPF, Best Operational Defence Project for its work at MOD Whitehall.

Civil Engineering & Specialist Businesses

Civil Engineering

In Scotland, Skanska was awarded a £6 million project to undertake the complex redevelopment of the Harthope Viaduct in South Lanarkshire. Skanska’s civil engineering and piling and ground engineering expertise meant that it was able to offer an integrated solution to the client Network Rail.

During the first half of 2005, Skanska was awarded a hat trick by the Highways Agency. Under its Early Contractor Involvement programme.

Firstly the company successfully secured the £241 million M1 junctions 6a – 10 in joint venture. This was followed by the award of the £23 million Temple Sowerby Bypass scheme in Cumbria and towards the end of the first quarter Skanska secured its third highways scheme – M1 Junction 19 interchange improvements near Rugby.

Specialist Businesses – Skanska UK’s specialist business continue to perform well, leading the industry in the markets in which they operate and underpinning the success of Skanska UK’s ability in both PFI/PPP, Commercial Construction and Civil Engineering to offer total solutions.

In London, Skanska’s specialist ceilings and decorative plasterwork operating unit secured a £1.5 million contract to revamp the ceilings at the redevelopment of the Royal Festival Hall on the South Bank.

The company’s specialist steel decking provider has also secured at £500,000 contract to supply the floor decking for the world’s tallest hotel – the 333 metre Rose Rotana Hotel in Dubai.


Utilities

Skanska��s utilities started work on its alliance contract to replace some 3,200 kilometres of gas distribution mains in the North London area. Skanska is carrying out the work, which is valued at around £400 million, in joint venture with McNicholas Plc under an eight-year Alliance for Transco Plc, a subsidiary of National Grid Transco (NGT).

Construction

Skanska’s project manager for the Radisson SAS Hotel project at Stansted Airport, Bill Brock, has received the prestigious Construction Manager of the Year Award - Gold Medal from the Chartered Institute of Building.

In London – Skanska topped out The Crown Estate’s new headquarters – 16 Burlington Place on the Capital’s Regent Street, part of a £500 million redevelopment programme to provide 21st Century retail and office accommodation. Work now continues for the completion of the scheme at the end of 2005.

Also in London – Skanska has reached an important milestone on its commercial and retail development for Southpoint General, Palestra, with the completion of the structural steel frame, and the commencement of basement services installations – three months ahead of schedule. Work now continues for the completion of the total scheme in Summer 2006.

Skanska also established a dedicated team combining the skills of both construction and mechanical and electrical specialist for the design, construction and servicing of data centres and infrastructure related projects.

A copy of Skanska AB’s results, also released today, can be found at www.skanska.com.