Heijmans (construction, infrastructure and property development) will close 2004 in line with previously expressed expectations. Revenues will come out at approximately € 2.6 billion, while net profit will amount to approximately € 66 million.
This is before charges in connection with fines to be imposed in the context of the irregularities in the building industry. No account has been taken here of the positive effects of any reduction in corporation tax rates. Profit per share thus comes out at € 2.65 per share after goodwill amortisation and cumulative preferential dividend.
'A respectable performance under difficult market conditions,' according to the chairman of the Heijmans executive board, Guus Hoefsloot. Strategic reorientation and strengthening of the company´s financial position (improvement in cash flow and reduction of net debt) were at the centre of Heijmans´ policy this year. The focus was primarily on growth in the market for private property, based on strong ground positions, on the development of new concepts and on steering the organisation towards becoming a full service business. Besides this, policy also focused on restructuring and a selective tendering policy in difficult markets like infrastructure.
Development of activities
Expectations are that the total number of homes sold in 2004 will rise by approximately 17% to some 3,500 (2003: 2990). In Belgium the rise amounted to 26% (from 158 in 2003 to approximately 200 in 2004), in the Netherlands approximately 16% (from 2832 in 2003 to approximately 3300 in 2004). Some 65% of homes sold was on land controlled by Heijmans, approximately 35% from competitions won. With regard to private property development, successes were recorded with the innovative concept, Wenswonen®, currently being implemented in seven municipalities.
The office market continues to contend with vacancies although there is an observable shift from old to new buildings.
Heijmans interprets full service business as the provision of building-related activities that cover the entire - or at least a major part - of the construction value chain: from design and consulting to execution, maintenance and management. Examples of these full service projects are the Harnaschpolder, the Leerpark Dordrecht, the ring road N242 at Alkmaar and the section of the A73 between Venlo and Swalmen (see www.heijmans.nl for more information). Besides these, a large number of small-scale contracts also qualified as full service projects.
In building, in a market characterised by sharp price forming, Heijmans noticed plenty of high-quality demand from the healthcare and education sector. Heijmans is currently building or renovating 10 hospitals and is active in approximately 31 schools. Besides this, Heijmans is focusing on the PFI (private finance initiative) projects that the government is bringing onto the market. In one of the largest projects, the renovation of the Ministry of Finance, the consortium in which Heijmans is participating is now one of the final four candidates.
In the infrastructure division, price levels seem to have bottomed out. Major projects that will come to an end in 2005 like the Betuwe line and HSL are contributing to Heijmans´ positive result in this sector. A number of newly won projects will make reasonable provision for the deployment of manpower thus made available. In addition to this a number of new projects will be put on the market in the foreseeable future, particularly relating to motorway maintenance. Heijmans is confident that the market will recover and, as a result, is investing approximately € 15 million in the construction and renovation of asphalt production plants, among other things.
Restructuring took place in the infrastructure division, particularly in cables and pipelines, in both the Netherlands and Belgium. Consequently, the Belgian activities as a whole will show a positive result again, in contrast to 2003 when the result was negative. The German market remains poor, while activities in the UK are