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Aarsleff forecasts static UK market in 2019

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UK-based Aarsleff Ground Engineering’s parent company Aarsleff has said that it expects the current level of activity in the UK to remain unchanged in the year ahead.

Aarsleff made the forecast as part of its preliminary annual report for the 2017/2018 financial year in which is revealed that results in the UK developed positively but added that “there is still some way to go before results are satisfactory”.

Aarsleff said that in the coming year, its UK subsidiary will focus on selective order acquisition as well as shutdown of non-profitable activities.

Overall, Aarsleff reported that revenue from its geotechnical work had increased 8.7% compared to the last financial year to DKK1.89bn (£229M) and its EBIT margin was 4%, which the company described as developing positively but below the 7% target set for the segment.

A statement from the company said: “At the beginning of the financial year, segment results were expected to reach an EBIT level of 5% of revenue. After the third quarter, this was adjusted downwards to 4%.

“In the new financial year, an approximate 5% revenue growth is expected and an EBIT margin of 4.5%. The long-term expectation to revenue development is 5% to 10% per year, and the EBIT margin target for the segment is 7%.”

Commenting on the performance of its other regional ground engineering businesses, Aarsleff said: “The results of the Danish operations were lower than expected due to a bad capacity utilisation within the ground engineering business in the first half of the financial year. The level of activity was high in the last part of the financial year, and the order backlog is satisfactory. The performance of the pile factory was satisfactory.

“The company in Sweden continued the positive development and delivered results above expectations. Revenue increased driven by, among other things, a high level of activity within residential building, for example in Gothenburg where Aarsleff delivered ground engineering work for the establishment of the Karla Tower, which at 245m will be the tallest building in Scandinavia.

“In Germany, results were unsatisfactory, and the company was loss-making. The severe decline in the market for foundation of onshore wind turbines resulted in an adjustment of the organisation to the current market conditions.

“In Poland, the level of activity was increasing. Results improved significantly compared to last financial year and exceeded expectations at the beginning of the year.”

Aarsleff also set out its aims for its ground engineering business in order to improve efficiency and profitability through increased collaboration between its regional operations and greater use of common standards with product and method development. The company also committed to a more project-based business approach and organisation in line with the development of the individual units. According to Aarsleff, the initiatives are aimed at creating both technological breadth and earnings potential.

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