The US firm helped the group’s professional services division triple revenue from £558m to £1.6bn and increase divisional profit from £13m to £85m. “2010 was a transformational year for the Group in respect of its professional services capability,” the company said.
£7.2bn of the group’s order book relates to work expected to be carried out in 2011, an increase of 9% on the equivalent figure of £6.6bn in the order book at the end of 2009.
Overall, group revenue, including joint ventures, was up 2% on 2009 to £10.5bn.
Pre-tax profit before exceptional items and amortisation was up 20% to £319m, but down 29% to £187m after exceptional items and amortisation, mainly relating to the acquisition of Parsons Brinkerhoff.
The construction services division improved its operating margin from 2.8% to 3.1%, meaning that despite a 10% fall in revenue to £6.7bn, profits were up 2% to £212m.
“2010 was a good year for Construction Services in weak construction markets, with excellent operational delivery of completed projects and project milestones,” the company said. “Revenue declined by 10% relative to 2009, although compared to the 13% decline in the first half of the year, this was an improved performance in the second half.
“Order intake was particularly encouraging, bringing the year-end secured order book to £9.2bn compared to £8.2bn at the end of 2009. This improvement was due to major project wins such as Denver Eagle P3 rail, Utah Data Centre and Dallas Fort Worth International airport in the US; Heathrow Terminal T2B, Crossrail and Building Schools for the Future (BSF) contracts in the UK; and significant wins for Gammon in Hong Kong; as well as hundreds of other contracts throughout the business.
“In the UK, despite a weak first half and uncertainty in the market following the Comprehensive Spending Review, we have had good project wins, completed milestones with success and maintained progress on cost efficiencies. There was a strong operational performance from the building business, and a good overall performance from civil engineering work.
“Looking ahead in the UK, we expect reductions in public sector spending to be offset by long-term spending on energy and other civil infrastructure projects. In the short-term, our UK construction business should benefit from the diversity of its activities; our ongoing school building work, a slow return to commercial building markets and a build-up in energy and power markets should come together to yield a steady performance.”
Chief executive Ian Tyler said: “We are pleased with the resilient set of results achieved in challenging market conditions in a number of our major markets. The diversity and strength of the group is evident in the overall performance, and the successful integration of Parsons Brinckerhoff has driven our growth.
“We have started 2011 with a record order book, a focus on cost and operational delivery and the intention to generate additional profits from PPP asset disposals. While we do not expect, in the short term, a meaningful recovery in the UK and US infrastructure markets, we expect to make progress this year.
“Over the medium and long term, we expect global infrastructure to be a growth market. We have put in place a clear strategy, and the group is well-placed to benefit from the growth in this market based on our depth of infrastructure knowledge, breadth of capability and the strength of our balance sheet."
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