Balfour Beatty snags more contracts with Carillion’s collapse

British construction group Balfour Beatty said on Wednesday it won more business following the collapse of Carillion. (Balfour Beatty)
Updated 13 March 2019
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Balfour Beatty snags more contracts with Carillion’s collapse

  • The downfall of Carillion was a constant reminder of how little room for error there was in the industry
  • The impact of Brexit on Carillion’s operations would be minimal

BENGALURU: British construction group Balfour Beatty said on Wednesday it won more business following the collapse of Carillion as it reported a nearly 10 percent jump in full-year profit.
The bankruptcy of Carillion in January 2018 was seen as a watershed for Britain’s construction sector that ended a race to the bottom in terms of pricing of bids for public sector work.
“We have benefited in our order book from Carillion’s collapse but that’s a function of us being a higher quality company and the low-price bidder not being there in the market any more,” said Chief Executive Officer Leo Quinn.
“Leo Quinn has successfully proven that revenue is vanity and profits are sanity,” said George Salmon, equity analyst at Hargreaves Lansdown.
But he added that the downfall of Carillion was a constant reminder of how little room for error there was in the industry.
That point is underlined by the plight of support services group Interserve where shareholders will vote on Friday on a debt-for-equity swap.
Quinn launched a turnaround plan after taking over at Balfour Beatty in 2015, his efforts chiefly involving a sharper focus on winning higher margin projects in its markets.
The company, which builds transportation, power and utility systems, attributed the rise in 2018 profit to its turnaround plan and its more selective approach to contracts.
Underlying pretax profit climbed to £181 million ($238 million) for 2018 from £165 million a year earlier, the company said, adding that margins in the United States and the UK came in above its target in the second half of the year.
The FTSE 250-listed company said its order book rose 11 percent to £12.6 billion at the end of 2018.
Quinn said the impact of Brexit on its operations would be minimal since it was a local business, but it had contingency plans in place to ensure it can continue to deliver on current and future work commitments.


US securities regulator: Musk’s contempt defense ‘borders on the ridiculous’

The Securities and Exchange Commission said Elon Musk’s argument that tweeting about car production forecasts on February 19 was not material information was nearly ridiculous. (AP)
Updated 17 sec ago
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US securities regulator: Musk’s contempt defense ‘borders on the ridiculous’

  • SEC lawyers: Elon Musk had not had a single tweet approved by a company lawyer, violating a requirement of a court-approved settlement order
  • ‘His interpretation is inconsistent with the plain terms of this court’s order and renders its pre-approval requirement meaningless’

DETROIT: US securities regulators countered Tesla CEO Elon Musk’s contempt-of-court defense Monday night, writing in court papers that he brazenly disregarded a federal judge’s order and that one of his arguments “borders on the ridiculous.”
Lawyers for the Securities and Exchange Commission, in a response to Musk, wrote that when the contempt motion was filed in February, Musk had not had a single tweet approved by a company lawyer, violating a requirement of a court-approved settlement order.
The October securities fraud settlement stemmed from tweets by Musk in August about having the money to take Tesla private at $420 per share. But Musk didn’t have the funding secured. Tesla and Musk each had to pay $20 million in fines and agree to governance changes that included Musk’s removal as chairman.
SEC lawyers led by Cheryl Crumpton wrote in a response to Musk’s defense that he interprets the settlement order as not requiring pre-approval unless Musk decides the tweets are meaningful to investors. The agency said Musk’s argument that tweeting about car production forecasts on Feb. 19 wasn’t material information is nearly ridiculous. “His interpretation is inconsistent with the plain terms of this court’s order and renders its pre-approval requirement meaningless,” the lawyers wrote.
US District Judge Alison Nathan in Manhattan will decide if Musk is in contempt and whether he should be punished. The SEC said no hearing is necessary on the matter “because there appear to be no disputed issues of material fact.”
Musk’s lawyers wrote last week that the Feb. 19 tweet merely restated previously approved disclosures on electric car production volumes. They wrote that the tweet, which was published after the markets closed, neither revealed material information, nor altered the mix of data available to investors.
The lawyers also accused the Securities and Exchange Commission of censorship and of violating Musk’s First Amendment rights by imposing a prior restraint on his speech.
But the SEC lawyers wrote that submitting statements for approval does not mean Musk is prohibited from speaking. “As long as a statement submitted for pre-approval is not false or misleading, Tesla would presumably approve its publication without prior restraint on Musk,” they wrote. The SEC also wrote that Musk waived any First Amendment challenge to the order when he agreed to it.
Musk’s lawyers also argued that the SEC’s motion for contempt is an over-reach that exceeds its authority. But the SEC said enforcement of the order is up to the judge, who has broad powers to enforce court orders.
Monday’s filing said the Feb. 19 tweet was different from prior public disclosures by the company. Also, Musk has regularly published tweets with “substantive information” about the company and its business, the SEC contended.
Musk’s 13-word Feb. 19 tweet said that Tesla would produce around 500,000 vehicles this year, but it wasn’t approved by the company’s “disclosure counsel,” the SEC has said.
The lawyer quickly realized it and summoned Musk to the company’s Fremont, California, factory to help write a correction. The company would make vehicles at a rate of 500,000 per year, but it wouldn’t produce a half-million in 2019.
Musk’s response by former Enron prosecutor John C. Hueston of Newport Beach, California, said that the settlement allows Musk “reasonable discretion” to determine if his communications would require the lawyer’s approval. In the case of the Feb. 19 tweet, Musk determined that it did not.
Legal experts say it’s unlikely that Musk will be punished severely, but the commission wants to get on the record that Musk violated the terms, to prepare for any future violations.
The tweet was posted and corrected after US markets had closed, but experts say regulators don’t care much about that because stocks are traded nearly around the clock. Tesla’s stock rose by just $1.10, or less than 1 percent, the next day.