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4 March 2011 |
engineering company Balfour Beatty hopes to create £30 million annual gross savings
during 2011, in part from procurement initiatives in the UK.
It said in its
financial results that £20 million of these savings, which will also come from
back-office functions, will go through to the bottom line. It is hoped they
will contribute to increasing its operating margin to between 3.5 and 4 per
cent, up from the 3.2 per cent operating margin experienced in the year ending
31 December 2010.
Beatty has invested £12 million in the creation of a UK shared service centre. This
cost, which occurred during 2010, has been written off the books as a one-time
The Newcastle unit
is designed to provide centralised accounting, payroll and procurement services
for the whole of the Balfour Beatty group. The business has grown organically
and through mergers, including the acquisition of Parsons Brinckerhoff.
which is a key supplier to the London 2012 construction, expects the shared
service centre investment to flow back into the business by the end of 2012, in
part through procurement savings.
financial results revealed a pre-tax profit of £319 million, up 20 per cent on
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.”