Balfour Beatty outlook confident as half-year profit more than doubles

(Alliance News) - Balfour Beatty PLC on Wednesday said it demonstrated "resilience" in the first ...

Alliance News 17 August, 2022 | 8:17AM
Email Form Facebook Twitter LinkedIn RSS

(Alliance News) - Balfour Beatty PLC on Wednesday said it demonstrated "resilience" in the first half of 2022 as profit rose with the company mitigating inflationary pressures.

Shares in Balfour Beatty were up 8.7% at 314.21 pence in London on Wednesday morning, the stock sitting at the top of the FTSE 250 index.

For the six months ending July 1, the London-based construction firm reported revenue was largely flat at GBP3.60 billion from GBP3.61 billion a year before.

Balfour Beatty's pretax profit more than doubled to GBP83 million from GBP35 million a year before as UK construction returned to profitability and the company's other business units all performed in line with expectations. Additionally, governments in the company's chosen markets are driving post-pandemic economic recovery by increasing infrastructure and sustainability spend, Balfour Beatty said.

The company said its growth is "underpinned by sustainable cash generation".

Furthermore, the company has increased the value of its order book 10% to GBP17.7 billion from GBP16.1 billion a year prior. "Balfour Beatty's focus on selectively bidding for contracts where it holds expert capability and can achieve improved contract terms has resulted in a higher quality order book with enhanced risk protection," it said.

Balfour Beatty announced an interim dividend of 3.5p per share, 17% higher than 3.0p the year before and 67% higher than its pre-pandemic payout of 2.1p.

The company noted inflation, knock-on wage pressures and higher energy and raw materials prices. However, the Balfour Beatty said it is confident in its ability to deliver future returns as it "demonstrated its resilience in the face of macro uncertainties" in the first half.

Its Support Services business is performing towards the upper end of forecasts and, as a result, is expected to deliver at the top end of its 6-8% industry standard margin target.

"Furthermore, full year profit from investment disposals is now expected to be in the range of GBP55 to GBP65 million. Driven by this performance and also the strength of the order book, the board expects underlying profit from operations to be ahead of its previous expectations," it said.

Chief Executive Officer Leo Quinn said: "With the group well-positioned to capitalise on the growing infrastructure market, underpinned by its unique capability and balance sheet strength, the upgrade to the full year performance gives the board further confidence in future capital returns."

By Dominique Pretorius; dominiquepretorius@alliancenews.com

Copyright 2022 Alliance News Limited. All Rights Reserved.

Email Form Facebook Twitter LinkedIn RSS

Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Balfour Beatty PLC 361.40 GBX -1.15 -

About Author

Alliance News

Alliance News provides Morningstar with continuously updating coverage of news affecting listed companies.

© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures