Discover the Latest News on a Gateway 44 Retail Park, the 200 Plymouth Construction Enterprises, and Cracks in Balfour Beatty Bull Case

In today’s news at UKconstructionblog, we will look into the signing of permits that have been applied for in a Carlisle industrial area, suggesting the arrival of a major retail chain. That request concerns Gateway 44 Retail Park, Unit 3. There are almost 200 construction companies in Plymouth that are experiencing major financial difficulties. The United Kingdom’s impending “golden age” of infrastructure spending is in jeopardy of failing before it even gets off the ground. Last month’s dismal “mini-budget” completely derailed Liz Truss’s tenure as prime minister and undermined investor confidence in the UK’s financial situation.

Home Sales could be on the horizon for Gateway 44 Retail Park

Original Source: Home Bargains may be on the way for Gateway 44 Retail Park

A large retail brand may be coming to a Carlisle industrial area after a sign application was submitted.

Carlisle City Council has received a planning application for Unit 3 of Gateway 44 Retail Park to display non-illuminated and non-illuminated signage, including building signage, vinyl window graphics, and totem signs.

The application was submitted to the council on Thursday, October 20.

TJ Morris, owner of Home Bargains, submitted it.

By 2022, the UK had 575 Home Bargains outlets.

The chain built a new location in Workington in May.

Hobby Craft, B&M, Costa, Currys PC World, and Next Home are at Gateway 44.

Chancerygate was Carlisle City Council’s Gateway 44 developer. Caddick Construction built the $5.6m project.

Gateway 44 industrial estate launched in 2020 and has been quite successful.

The Carlisle City Council-owned building includes seven leasehold flats and will create significant new job possibilities’

Home Bargains didn’t comment.

200 Plymouth construction enterprises in financial difficulty

Original Source: More than 200 Plymouth building firms in significant financial trouble

Latest numbers suggest more than 1,200 Plymouth companies are in trouble, with construction worst affected.

Over 1,200 Plymouth enterprises are in financial distress, and the situation is worsening. The newest Red Flag Alert study reveals construction firms are hurting the most as inflation, interest rate hikes, and consumer confidence fall.

According to Begbies Traynor, 1,245 Plymouth enterprises were in financial crisis in Q3 2022, up 3% from Q2 this year. Construction companies are struggling the most in Plymouth, with 18% of all distressed firms, or 224, in this industry, followed by real estate and property and support services.

Several city construction firms have failed this year, including the Midas Group, Complete Building Developments, Neal Stoneman Scaffolding, A&P Property Developers, and Karl Thomas Flooring Ltd. Henry W Pollard and Sons Ltd, situated in Plymouth, left outstanding debts of £15m.

7,838 Devon firms were in financial trouble. This is a 3% quarterly increase and a 2% increase from the same period in 2021.

Again, construction enterprises are the most hit, with 1,265 in financial difficulties in the last three months. The number of struggling hotels, real estate, and auto enterprises jumped 6% in the last quarter.

In the third quarter of 2022, 610,000 UK firms reported financial difficulties. Begbies Traynor says companies are suffering due to growing prices and low confidence.

The data portrays a disturbing picture for UK firms as an increasing proportion are falling victim to the unusual economic pressures that continue to build in the economy.

With official inflation at 10.1% and “real economy” inflation likely exceeding this, businesses face the prospect of interest rates climbing above 5%. This could force distressed businesses into insolvency as debt accumulated over the past decade and during the pandemic becomes unserviceable, Begbies Traynor said.

The latest business CCJ data shows the economy’s hardship. Often an early indicator of financial difficulty, the number of CCJs for the first nine months of 2022 was 63,831 – more than 2021 or 2020 and virtually the second highest total since 2010. Similarly, Winding Up Petitions, a more serious action by creditors, were 237% more than the same time in 2021, suggesting that firms are using aggressive legal enforcement techniques to reclaim debts.

Scott Kippax, partner at Begbies Traynor in Devon, stated, “We’re in economically volatile times, where firms are being pounded on numerous fronts by rising costs in energy, raw materials, and labour.” With rising borrowing costs and corporate tax, today is a tough time to be in company.

“As a region dependent on tourism, it’s troubling to see the hotel sector experiencing the most financial difficulties in recent months. The economy, already weakened by two years of pandemic upheaval, faces the real threat of a recession at a time when firms need stability to get back on their feet.

Instead, input costs are growing and businesses that borrowed to exist for years are trapped with debt they may be unable to repay, especially with interest rates predicted to jump to 6% in 2023. We’d urge company directors and business owners worried about their ability to trade through this tough period to seek competent counsel.

Shaun Barton, national online business operations director at Real Business Rescue, says the situation will only get worse. “This time last year we were reporting on a brighter picture, with Q3 2021 seeing the biggest number of SMEs moving out of distress since before the pandemic,” he said.

Companies are under tremendous cost pressure a year later. As a result of the cost of living crisis, consumers have less disposable income to support local companies as they did last year. Combined, these two variables have a disastrous impact on businesses across the country and will only become worse without greater support.

Balfour Beatty case has cracks

Original Source: Cracks in the Balfour Beatty bull case

The UK’s ‘golden age’ of infrastructure spending is in jeopardy. Fahy reports.

Balfour Beatty has had a wonderful year so far (BBY). Even in a less tumultuous market, its year-to-date share price gain of 13% (backed by £150mn of buybacks) would be solid enough, but when compared to rivals like Kier (KIE) and Morgan Sindall (MGNS), it’s cause for celebration.

Leo Quinn, whose turnaround credentials were developed at De La Rue (DLAR) and Qinetiq, has led an exceptional team (QQ). Balfour Beatty had a 2014 pre-tax loss of almost £300m when he became CEO in January 2015. Poor contract discipline, a complex structure, and excessive overheads resulted from growth.

Quinn’s turnaround plan, Build to Last, needed another year and £199mn in pre-tax losses to bear fruit. Balfour Beatty sold non-core companies in the Middle East, Indonesia, and Australia. Recently, it stopped bidding on London fixed-price housing projects.

This is part of a move to reduce risk in its order book by taking on fewer contracts where it’s liable if materials or labour costs rise. Half of its 2018 pipeline was fixed-price. Now it’s 14%. Target cost work, where the contractor and client establish a projected cost plus a fee and then split savings (or overruns), now makes up three quarters of its order book.


Changes have made Balfour Beatty less dangerous. Long-term stockholders may wonder if their patience was rewarded. Its £7.2bn turnover last year was somewhat lower than when Quinn took charge, and it hasn’t produced spectacular profits since 2015.

Last year’s operating margin was 1.4%, reduced by a $65mn (£58mn) US Department of Justice penalties after Balfour Beatty Communities acknowledged overcharging for military housing. One-off hits like that can substantially hurt contracting margins. Last year’s underlying operating profit of £197mn remained flat compared to four years earlier. Since Quinn’s appointment, the company’s share price has performed below average, albeit slightly. The shares have increased 45%, compared to an industry standard of 49%.

Improved earnings expectation contributed to this year’s outperformance. The business said its UK construction services arm, which generates 34% of revenue, is on pace to reach the industry standard margin of 2-3% and its support services arm is expected to create a return “at the upper end” of its sector margin range of 6-8%. The group expects to make £55m to £65m from infrastructure sales.

Will gains be sustained? Balfour’s investment pitch focuses on how governments on both sides of the Atlantic are spending money on infrastructure.

In response to the worldwide epidemic, the UK government launched a National Infrastructure Strategy that required £650bn in public and private sector spending – the most in decades. Quinn said in April that the UK infrastructure market’s future “looks quite promising.” “We’re approaching a decade of infrastructural growth,” he added.

The government will provide £100bn by 2024-25, according to an Infrastructure and Projects Authority review of the National Infrastructure and Construction Pipeline.


The disastrous mini-budget’ last month destroyed Liz Truss’s stint as prime minister and shook investors’ faith in the UK’s fiscal condition. The cost of the scaled-down energy price guarantee and other measures will drive public sector borrowing above Charter for Budget Responsibility limitations, according to Pantheon Macroeconomics.

Abandoning unfunded tax cuts will save £30bn, but the new chancellor still has to find £38bn, says Pantheon’s chief UK economist, Samuel Tombs. He expects this to be rounded up to £50bn to ensure the government has enough budgetary headroom, and 75% of this would be done through spending cuts rather than tax rises.

Given additional declines in gilt yields after Rishi Sunak’s appointment as prime minister, Capital Economics expects cuts of roughly £30bn. It still maintains that a fundamental shift in fiscal policy is underway, from one that was poised to stimulate the economy to one that will drag.

She anticipates investment spending to drop to 2% of GDP, or £14bn. Higher borrowing rates could reduce corporate and housing market investments, the organisation said.


A lower outlook for UK government spending won’t necessarily hurt Balfour Beatty’s profitability. The US construction services arm generates more revenue, and the $1.2tr Infrastructure Investment and Jobs Act should inspire $550bn in new federal construction investment over five years.

US job markets are far more competitive. Balfour Beatty’s £7.2bn in sales last year dwarf rivals Kier, Morgan Sindall, and Laing O’Rourke (£3bn). Engineering News Record ranks it 16th among US contractors.

Its exposure to international markets may merit a premium share rating over rivals, but how much? Balfour Beatty trades at 10-times forecast earnings, compared to 6-times for Morgan Sindall, 4-times for Costain, and 3-times for Kier. Balfour Beatty shares have a PEG ratio of 6.8, above the neutral level of 1.0. That indicates overvalued shares.

City experts disagree, though. FactSet recommends buying four out of five Balfour Beatty shares, with a mean target price of 366p, a 24% upside from the present price.

Liberum set a 400p target price on Balfour Beatty’s shares this month, believing the company could gain from a ‘golden age’ of infrastructure projects like HS2 and Sizewell C. These are examples of how a cash-strapped government could cut costs. Sizewell C is years behind schedule and £8bn over budget before construction. A Financial Times story says phase one of HS2 is “several billions of pounds” over budget and that the Treasury is aiming to save money on phase 2 by eliminating or postponing elements of the system.

Balfour Beatty worries that a financially stretched UK government will do this across the board, a risk not reflected in its share price. Sell.

Summary of today’s construction news

Overall, today we have discussed about a large retail brand Home Bargains, owned by TJ Morris, he submitted a planning application for Unit 3 of Gateway 44 Retail Park to Carlisle City Council to display non-illuminated signage, including building signage, vinyl window graphics, and totem signs. The most recent figures indicate that 1,200 Plymouth businesses are in financial difficulty, with the construction industry being the sector most severely impacted. It is a risk that Balfour Beatty believes is not represented in its share price, and it is based on the belief that a financially strained UK government will do this generally.

Related Posts