Business roundup

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.

The rate of economic growth strengthened in the three months to July, with business and professional services the driving force, according to the latest CBI growth indicator. The survey of 736 businesses across the manufacturing, retail and service sectors showed a reading of +20% in the three months to July, compared with +14% in June. This rebound was largely due to a faster pace of growth in business and professional services with manufacturers and retailers reporting growth, albeit at a more moderate pace. Expectations remain robust, with firms anticipating that growth will strengthen a little further in the next three months.

The combined business of Tarmac and Blue Circle have relaunched as Tarmac, following the acquisition of Tarmac by materials giant CRH from Lafarge and Anglo American. The newly combined business can now say it is the market leader in aggregates, asphalt, contracting services, lime and powders and is a leading player nationwide in cement, concrete and other building products.  

UK industrial output fell 0.4% in June following a drop in oil, gas and mining production, according to figures from the Office for National Statistics (ONS). The ONS blamed part of the fall on maintenance in a major oil field. Compared with a year ago, total production output is estimated to have increased by 1.5%. Output from the manufacturing sector increased by 0.2% in June, following a 0.6% drop in May.

Tender prices are forecast to rise by between 4% and 6% annually over the next five years according to the latest predictions from the RICS’ Building Cost Information Service. From 2016 onwards tender prices are set to increase markedly as materials prices and wage rises continue.  Total new work output will surpass the pre-recession peak of 2007 during 2016, and will be in the order of 15% higher than the 2007 peak by 2019, BCIS said.

Costain has reported pretax profits up 72% to £10M in its half year figures. Turnover rose 17% to £621M largely made up of revenue from its highways, rail and power market contracts which delivered £475M, with profits of 23.6M up from £16.9M on the same period last year. Costs from the completion of the Greater Manchester Waste Disposal Authority PFI contract meant the natural resources division was hit by a £7.4M loss.

Royal BAM Group’s UK operations have reported first half profits, reversing the losses of last year.  The UK civil engineering, building and property businesses had a £2.9M profit during the first six months after a £2.7M loss in the first six months of 2014. Turnover rose 18% to £776M. 

Infrastructure contracts worth £2bn were awarded in July according to the latest Economic & Construction Market Review from Barbour ABI.  The two largest were a £250M extension to the Burbo Bank offshore wind farm and a Beddington based ‘energy from waste’ facility worth £200M. From a regional perspective, it was the North West that dominated infrastructure for the month, with 32% of all contract values and an increase of almost 25% in activity when compared to July 2014. 

Economic growth continued to pick up pace in the three months to August, with strong expectations for the next quarter, according to the latest CBI Growth Indicator. The survey of 754 respondents across the manufacturing, retail and service sectors showed the pace of growth sped up for a second month running, with a balance of output volumes at +31% in August. This was just below the 2015 high recorded in May (+33%), itself the highest balance since May 2014 (+35%). Expectations for the next three months are buoyant, with another firm expansion in business volumes anticipated, at a slightly cooler rate.

Carillion revealed its new orders had fallen to £1bn in the first half of this year from £3.4bn in the same period last year when it announced its results last week. The construction group said this was due to a slow down in public sector contract awards. Turnover for the first six months of the year increased 21% to £2.26bn with pretax profits flat at £67.5M. 

WSP is to buy Canadian engineering consultancy MMM for $425M (£204M). The 2000 strong MMM business produced net revenues of £127M last year, three quarters of it from Ontario.

Government is to up its 25% target for work placed with SMEs to circa 33% by 2020 minister for the Cabinet Office Matt Hancock has announced.  In 2013 to 2014, central government spent an unprecedented £11.4bn with small and medium-sized businesses – those employing 250 employees or less. This is equivalent to 26% of central government spend. The new target would mean an extra £3bn per year (in 2013 to 2014 terms) going to small and medium-sized firms directly or through the supply chain.

The latest quarterly EEF/DLA Piper Manufacturing Outlook survey shows that a ‘rollercoaster of risks’ caused by global economic uncertainty is taking a toll on UK manufacturing. Bright spots provided by domestic consumer demand and construction activity are not enough to hold the shadow of global factors at bay. Based on these latest findings, the current economic outlook and recent weaknesses in official data, EEF is halving its 2015 manufacturing growth forecast to 0.7%:  A global list of economic woes – including uncertainty in Europe, China and Greece – is casting a shadow over UK manufacturing, the organisations said. 

Office for National Statistics figures showed that £1.33bn of new work was carried out in the sector in July 2015 – more than in any month since December 2011. July’s infrastructure output represented a 2.7% increase on the previous month, and a 17.2% hike on the same month a year earlier. It came as all construction output fell by 0.95% from June and by 0.70% from July 2014.