Vinci Construction UK lost more than £44m last year after securing two contracts and increasing its fire provisions.
Newly published accounts for the 12 months to 31 December 2022 show the company fell to a pre-tax loss of £44.2m, compared with a profit of £23.6m for the year previous
The French-owned contractor’s turnover grew to £1.28bn from £1.16bn as work stepped up on projects such as HS2’s Old Oak Common site (pictured), in which works its subsidiary Taylor Woodrow.
But the group made provisions of £121.1m, including £51.5m for potential litigation and £47.8m for work on completed buildings.
This was almost double the £63m it set aside the previous year, and the accounts indicated that part of this was due to the UK government extending liability for defects in six completed buildings to 30 years
It also suffered losses on two fixed-price contracts it won in 2018, one for University College London (UCL) and the other for private hospital company HCA UK.
The contractor began work on UCL’s new east London campus in Stratford in 2019, and a £100m hospital for HCA in the same year.
In a statement with the accounts, chief executive Scott Wardrop blamed Covid and inflation for the losses.
“Our entire construction business also suffered from hyperinflation, labor shortages and a higher-than-usual attrition rate. All of this was heavily influenced by the worldwide cost-of-living crisis, the war in Ukraine, the Covid pandemic and Brexit,” he added.
Its Vinci Facilities arm was also awarded a successful PFI contract with the Coventry and Rugby Hospital Company to provide facilities management services to Coventry and Rugby University Hospital.
Reports from the administrators of the Coventry and Rugby Hospital Company show that Vinci was accused of failings in the facilities management service for which the hospital withheld payments from him before terminating the contract.
Wardrop added that the contractor expects to return to positive margins during 2023.
Last month, Bouygues UK revealed it had also nearly doubled its building security provisions following “post-completion liabilities arising from recent legislative changes relating to building security”. As a result, it made a pre-tax loss of £42m on turnover of £382m.
