Bouygues has booked substantial building-safety liability costs and has said it was impacted by subcontractor collapses last year.
The French contractor posted a pre-tax loss of £62.1m in its latest accounts for the 2023 calendar year – 48 per cent worse than its 2022 loss of £41.9m.
It tabled provisions related to the building-safety crisis totalling £147.5m for the year to 31 December – nearly double the £76.9m figure it put aside in 2022.
Much of that provision will be used in the next 12 years, with £31.8m set aside for the nearer future. But Bouygues also said it was “virtually certain” to recoup £32.1m worth of the provisions from its insurance provider.
The firm also spent £11.9m on remediation work during the year, according to its accounts.
Bouygues added that a “small number of failures of [its] subcontractors” also added to its deepening pre-tax loss.
“The loss for the year arose as a result of cost increases due to subcontractor performance, availability of labour, the conflicts in the Ukraine and the Middle East, as well as the continuing impact of post-completion liabilities relating to building safety,” the firm said in its accounts.
Turnover also dipped over the course of the year, coming in at £325.6m. Bouygues tabled a £382.6m turnover the year prior, and said the decrease reflected “the slowdown in contract awards as a result of market conditions”.
Its margin worsened from -10.9 per cent in 2022 to -19.1 per cent last year.
Bouygues said it had “continued to be selective in its bidding approach” over the course of the year.
Looking ahead, it stated: “Whilst the directors expect pressures on reported financial performance to remain during 2024, they believe that the company’s strategy should provide the foundations for improved results in future years.”
The contractor joined the government’s Responsible Actors Scheme this year, which meant it had to sign the government’s developer remediation contract. The contract, signed into law as part of the Building Safety Act 2022, requires developers and contractors to take responsibility for addressing building safety-related defects and keep residents informed of progress.
But the firm said signing up to the scheme had no impact on its financial statements because it had already made its provisions for the liabilities.
Bouygues has also been involved in court battles over cladding issues, including a £2m legal case it launched against a subcontractor in 2020 over defective cladding installed on a Premier Inn hotel in Bedford.
