Business roundup

“Robust flows” of new work in the commercial and civil engineering sectors in June have helped deliver the steepest overall growth since October 2014. The construction buyers measure Markit/CIPS Construction PMI index jumped from its small gain to 55.9 in May to 58.1 in June.  “UK construction companies experienced a growth rebound and surge in business confidence at the end of the second quarter. Survey respondents cited robust inflows of new work in June, adding to already strong order books across the sector,” said Markit senior economist Tim Moore.

The rate of economic growth slowed in the three months to June, but activity remained solid across the quarter as a whole, according to the latest CBI growth indicator. The survey of 752 respondents across the manufacturing, retail and service sectors showed a reading of +14% in the three months to June, compared with +33% in May. This slowdown was largely due to last month’s fast pace of growth in business and professional services not being sustained, CBI said. But respondents are anticipating that growth will bounce back in the next three months (balance of +32%).

Vinci’s UK construction business had a £217M pre-tax loss on turnover down 19% to £1bn in the year ending December 2014. A report in Construction Enquirer said that the firm suffered major cost overruns on its Nottingham tram project and big losses in the building business. Vinci’s civil engineering division ran up a pre-tax loss of £165m, while the building business was hit by problems on several jobs suffering a £50m pre-tax loss.

Councils in England and Wales have warned the national living wage could cost them an extra £1bn a year by 2020. The Local Government Association said about 93,000 council staff currently earned less than the £7.20 an hour wage proposed by Chancellor George Osborne.

Capita has acquired property consultancy GL Hearn for a cash consideration of £25M on a cash free, debt free basis, plus a deferred consideration of £5M. GL Hearn reported an operating profit of £5.8M on turnover of £31.2M in its last financial year up to 31 May 2015. Capita expects to grow the business and achieve a return on capital in excess of 15%. The company is a market leader in planning, development and regeneration. It employs over 250 staff, and has its head office in London. 

The new group of LafargeHolcim has now been officially launched following the successful completion of the merger between the two companies. In the UK, Aggregate Industries, a leader in the construction products market, employing around 3500 people, has been retained as part of the new LafargeHolcim group. Responding to the launch of LafargeHolcim from a UK perspective, Aggregate Industries CEO, Pat Ward, said:   "We're very proud to be part of the new LafargeHolcim group and look forward to making the most of the opportunities this presents to us in the UK."

Osborne has posted its financial results for 2014/2015, which show profit before tax increasing to £5.8M up from £5.2M in 2014. This was achieved on a slightly reduced turnover of £311M (2014 - £325m).  The contracor’s secured order book for 12 months (as at April 2015) has risen 22% to £242M from £199M in 2014. Osborne also announced that it is the only contractor to be shortlisted in the Customer Focus category for the 2015 Lloyds Bank National Business Awards.

Government is seeking view from business on the idea of appointing a small business commissioner to handle disputes over late payment and other supply chain practices that hit SMEs especially hard. The commissioner would help small firms access advice, support, mediation and conciliation services, and have the power to look into complaints and report on its findings.