Two engineering firms under Vinci anticipate declining turnover in 2024.
- Geotechnical and piling specialists facing reduced activity levels.
- Thames Tideway and HS2 projects contribute to revenue shifts.
- Economic conditions impact residential housing and commercial sectors.
- Management explores strategies to enhance future profitability.
The announcement that two engineering companies owned by a Vinci subsidiary are bracing for a downturn in their financial performance in 2024 comes as significant news. Geotechnical specialist Bachy Soletanche and its subsidiary, the piling expert Roger Bullivant, have reported expectations of diminished activity. This revelation is backed by recently published accounts, which indicate a notable reduction in workload for the upcoming year.
Bachy Soletanche attributes the projected decline in turnover to decreasing activity on two major construction projects. These projects, the Thames Tideway and HS2 rail initiatives, were previously significant revenue drivers. However, with lower activity levels anticipated on both ventures in 2024, Bachy Soletanche is preparing for a financial contraction. Despite an increase in turnover to £250.2 million in 2023, the company’s outlook is cautious, as the increase was largely attributed to ongoing works on these projects during the previous year.
The Thames Tideway project, a critical undertaking to enhance London’s sewage infrastructure, saw significant developments as the first four valves opened earlier this week. This marks a pivotal step in the project, which is nearing full operational capacity after eight years. Meanwhile, the HS2 project continues to face uncertainties, particularly concerning its funding and plans for extension from Old Oak Common, creating additional challenges for all stakeholders involved.
Roger Bullivant, on the other hand, highlighted a downturn in its primary market, residential housing, which resulted in a decrease in turnover from £97.4 million to £87.2 million. This downturn, coupled with a reduction in pre-tax profit from £7.5 million to £2.8 million, underscores the challenges faced by the firm. Nevertheless, the company is optimistic about maintaining a good performance in 2024 by focusing on emerging non-residential markets, which are seen as key growth areas.
Leadership within both firms is examining avenues to bolster profitability, including expanding market share and accessing new markets. Roger Bullivant’s Managing Director, David Clement, has emphasised the importance of improving site productivity and nurturing long-term client relationships as part of their strategic focus. Such efforts are critical as the company navigates deteriorating economic conditions and heightened interest rates, which continue to weigh on financial forecasts.
Both firms are strategically addressing anticipated revenue challenges amidst evolving market conditions.
