Thursday, September 19, 2024

Balfour Beatty benefits from UK construction business

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Profits at Balfour Beatty held more or less steady in the six months to the end of June, and the company said it is on track to deliver its full-year targets.

The infrastructure group was helped by its construction unit in the UK, but said there have been delays to some projects, especially in US office spaces.

Pre-tax profit dipped from £83 million to £82 million, the business revealed on Wednesday.

Balfour Beatty said that throughout the period it made progress on its work at the new Hinkley Point C nuclear site in Somerset.

It also said it has completed a second mile-long tunnel below an ancient Warwickshire wood for the HS2 high-speed railway line – the culmination of a three-year operation.

It added that planned delays to HS2 because of the Government holding back on funding will not have any material effect on its forecasts.

The company said revenue from its UK construction business increased 22.5% to a little over £1.5 billion, while revenue at its US construction arm dipped slightly to £1.7 billion.

Overall revenue rose 9.1% to £4.5 billion; however, the order book shrank from £17.4 billion to £16.4 billion.

Balfour Beatty said the reduction in the order book was due to progress it made on major projects in the UK and Hong Kong and delays to US commercial office projects.

The delays came as interest rates increased, causing some customers to “wait for economic stability”, it said.

Chief executive Leo Quinn said: “We continue to deliver from the scale and breadth of our lower risk order book, which, during this period of high inflation and interest rates, underpins the financial results reported today and our expectations for the full year.

“Looking beyond 2023, we have positioned Balfour Beatty strongly with unique capabilities and a sector-leading balance sheet, to capitalise on national plans to transform critical infrastructure, particularly in the energy and transport markets.

“This provides the board with confidence in both profitable managed growth and in our capacity to deliver significant future shareholder returns.”

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