Project Management and Construction report
| Operating Result $m | 08 |
07 |
|---|---|---|
| Operating profit after tax | ||
| Asia Pacific | 69.0 | 54.6 |
| Europe | 18.5 | (77.2) |
| Americas | 59.7 | 65.9 |
| Profitability ratio (EBITDA/Realised GPM) | ||
| Asia Pacific | 50% | 44% |
| Europe | 17% | n/a |
| Americas | 34% | 47% |
| Gross margin (Realised GPM/Revenue) | ||
| 5% | 3% | |
- Bovis Lend Lease delivered a strong result with improved performance across all markets. Global profit after tax was $147.2 million, up significantly on the June 2007 result of $43.3 million, which included an $118.8 million after tax provision taken against certain UK projects, including the Manchester Joint Hospitals project.
- In Asia Pacific, profit after tax was up 26% to $69.0 million from $54.6 million in 2007, reflecting strong market conditions and successful completion of a number of projects in Australia.
- In Europe, the UK business continues to return to normal levels of profit, although the business continues to be impacted by the work-out of the loss-making UK projects reported in 2007. The remainder of the European business continued to generate a strong performance.
- In the Americas, profit after tax was impacted by costs relating to a fire at the former Deutsche Bank building in New York and the negative impact of currency movements.
- Backlog Gross Profit Margin increased by 10% to $788.3 million, with 57% expected to be realised as profit in the 2009 financial year.
Year in review
| Backlog | 08 |
07 |
|---|---|---|
| Backlog Gross Profit Margin $m | 788.3 | 717.2 |
| New work secured GPM $m | 715.5 | 480.7 |
| Backlog realisation | ||
| Year 1 | 57% | 59% |
| Year 2 | 29% | 27% |
| 3 years + | 14% | 14% |
Outlook
- In Asia Pacific, we continue to see strong market conditions for social infrastructure, particularly hospitals.
- In the UK, despite some slowdown in commercial, we are still seeing opportunities in government. In addition, there are big opportunities for low risk growth in Eastern Europe and the Middle East which we will look to pursue over the next three years.
- In the Americas in terms of outlook, top line growth in the business is expected to soften.
Priorities
- Safety
- Driving consistent and sound operating disciplines across all the operating regions.
- Continued focus on margin improvement – ensuring we get the risk/reward balance right.
- We will continue to expand into new markets with an increasing focus on growth economies such as India, Eastern Europe and the Middle East.
Key events
Asia Pacific- Key contributions to gross profit margin in Australia included the Rouse Hill Town Centre retail project in Sydney, the Queensland Government Preparatory Schools rollout and the Correctional Facilities projects in Queensland, and the Australian Taxation Office building and Australian Capital Territory Correctional Facility in Canberra.
- In Asia, the telecommunications rollout in Japan and the Singapore Capacity Expansion project were key contributors to gross profit margin during the year.
Americas
- Profit after tax was negatively impacted by foreign exchange movements of $8.4 million and costs relating to the fire at the former Deutsche Bank building in New York.
- Key contributions to gross profit margin included the Mets Stadium, the residential projects at 15 William Street in New York and Paramount Bay in Miami, and the Trump Taj Mahal hotel project in Atlantic City.
Europe
- The European business contributed $18.5 million of profit after tax for the year. Performance improved, although this business continues to be impacted by the work-out of the UK projects where a provision was taken in the prior year and margin reductions on a number of projects.
- Key contributions to gross profit margin included the UK Ministry of Defence SLAM project, the commercial projects at 200 Aldersgate Street and Morgan Stanley Phases 2–7 in London, and the BP Global Alliance.
Durrat Al Bahrain
Islands in the sun
Aerial view of Durrat Al Bahrain, in the southern end of the Persian Gulf
The 21 square kilometre site has 12 islands made up of six residential atolls, five residential petals and a central island hotel linked by a series of bridges.
Durrat Al Bahrain, a luxury residential, commercial and tourist resort project, is designed to eventually accommodate around 60,000 people and is the first major tourism development to be project managed by Bovis Lend Lease in the Kingdom of Bahrain.
Located at the southern end of Bahrain in the Persian Gulf, Bovis Lend Lease has been appointed in joint venture with Kuwaiti Manager Company to provide development and project management services for the first phases of the coastal resort city, a US$6 billion joint development between the Government of Bahrain and Kuwait Finance House.
Durrat Al Bahrain is a challenging design, consisting of reclaimed land and extensive coastal sculpturing. The 21 square kilometre site has 12 islands made up of six residential atolls, five residential petals and a central island hotel linked by a series of bridges. Each atoll supports approximately 160 villas offering either direct beach access or water aspects providing mooring facilities, together with exclusive community facilities, with 125–145 villas on each petal and a common beach area and similar facilities to the atolls. The project includes a further three islands that make up a 400 berth marina.
Bovis Lend Lease has structured the project into a large number of work packages, varying from design and consultancy assignments, to construction and concession contracts. First phases of the project cover dredging and reclamation, shore protection, bridges, roads, services and utilities, landscaping, villas, golf course, clubhouse and community facilities. Future works will include high rise buildings, retail malls, hotels, schools, hospitals and other amenities necessary to build a city in the desert.
The project commenced in 2004 and is on track, with all the islands and mainland reclamation completed. Infrastructure work is well underway for Phases 1 & 2 and the first villas are scheduled for occupation in 2008.
ATO Headquarters
Largest government tenancy in Australia
ATO headquarters, Canberra, Australian Capital Territory
Bovis Lend Lease successfully delivered a modern, attractive and energy efficient workplace.
The new commercial office development for the Australian Taxation Office (ATO), located in the heart of Canberra, represents the largest single project undertaken by Bovis Lend Lease in our 50 year history in the Australian Capital Territory (ACT).
The landmark $240 million development covers a huge 63,000 square metres of net lettable area and is the largest government tenancy construction project in Australia to date. Bovis Lend Lease provided full project management, design and construction services over a two year period for client and owner, QIC.
Accommodating more than 4,000 employees, the ATO building occupies two separate office towers known as Precinct B and Precinct C within QIC’s Section 84 precinct.
Both QIC and ATO encouraged the achievement of a superior quality product with a focus on environmentally sustainable design and Bovis Lend Lease successfully delivered a modern, attractive and energy efficient workplace that has transformed and revitalised the eastern end of Canberra’s city centre.
