Stable margin and quality sales for Skanska UK at Half Year

Press release 28/07/2005 00:00 CET

Skanska UK Plc today announces its results for the half year 2005 ending June 30th.

At £10.0 million, the profits represent a stable three per cent of revenue. Order backlog at £1134.2 million does not include those projects at preferred bidder stage. The financial close of these preferred bidder schemes in the second half of 2005 will see Skanska's order book double at the end of the 2005 financial year compared to that at the end of 2004.

David Fison, Chief Executive, Skanska UK Plc said, "The results are where I want them. Performance is up and the order book is coming through. Our sales are showing positive signs for growth going forward, both during the second half of 2005 and into 2006."

Highlights for Skanska UK Plc during first six months of 2005: -

Skanska UK's performance received significant external praise during the first six months of 2005 with the company receiving eight industry awards. These awards were received for both project performance and business processes and included: -

- PFI/PPP Contractor of the Year - Building Magazine
- Best Private Sector Consortium - PublicPrivateFinance Awards
- Best Operational Defence Project - MOD Whitehall - PublicPrivateFinance Awards
- Best Building Contractors Safety Awards - Building Magazine
- Gold Award from the Association of Interior Specialists for work at Lakeside Shopping Centre
- Considerate Constructors Scheme's National Gold Award for the Selby Bypass Project, Derby and Coventry PFI Hospitals Projects and a Silver Award for its work at Logford House.
- The George Gibby Price from the Institution of Civil Engineers for its work at Port Talbot in South Wales.

- Skanska continues to lead the pack in its Health & Safety performance - independent annually audited results showed an accident incident rate reduction of 23% from the period June 2004 - June 2005. Skanska is now driving a zero harm policy on all its sites with the launch of Safety@Skanska, a near miss reporting system to ultimately eliminate accidents on its sites, whilst at the same time, donating money to Mencap.

*Skanska UK's health and safety accident incident rate is calculated using 1000 persons at risk. For example - accidents x 1000 divided by number of people at risk.

- During the first six months of 2005, five senior internal appointments were made:

- Rob Shed, was appointed managing director of Skanska UK's PFI/PPP operating unit taking responsibility for maintaining Skanska's market leading position in this sector and ensuring sustained growth for the business in developing PFI/PPP markets.

- Paul Wright, was appointed operations director to the board of Skanska UK's PFI/PPP operating unit. Paul joined the company in 1984 as site engineer and has developed through the business working in both the construction and engineering businesses. Most recently Paul has undertaken senior roles on the company's PFI projects in the Custodial, Education and Healthcare Sectors.

- James Harbord, was appointed commercial director to the board of Skanska UK's PFI/PPP operating unit, succeeding Rob Shed following his promotion to managing director.

- David Myers, was appointed managing director of Skanska's Mechanical, Electrical & Hard FM operating unit, taking responsibility for the growth and development of this successful business to continue its market leading position.

- Keith Marr, was appointed managing director of Skanska's in-house design operating unit, taking responsibility for the development of this business to ensure its continued value adding services to all Skanska UK operating units.


- 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 Kent, Skanska successfully completed the first phase of its £36 million PFI contract to design, build, finance and operate two new schools for the London Borough of Bexley, with the handover of the new sports hall at Welling School.

- 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.

Civil Engineering & Specialist Businesses

- Civil Engineering - 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.


- 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).


- 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.