THE UK’s biggest construction company, Balfour Beatty has unveiled forecast-beating profits and a record order book worth more than £10bn.
It said underlying pre-tax profits were 36% up at £76m for the first half, ahead of consensus City forecasts of £71m.
Balfour Beatty’s order book now stands at £10.6bn after fresh project wins and its £184m acquisition of US builder Centex last February. Chief executive Ian Tyler said the results were pleasing. “We anticipate further good progress in the second half of the year.”
The company reported a strong performance from its UK construction division, with progress on major projects including schools at Bassetlaw in Nottinghamshire, North Lanarkshire, Birmingham and Manchester.
Operating profits for the building division increased 76% to £30m, reflecting a first contribution from Centex, which has just landed four deals with the US Army totalling £367.3m.
The London company said the domestic market for public private partnership (PPP) deals remained strong, despite writing off £103m from its involvement with the Metronet consortium working on London’s Tube network, which went into administration last July.
The group said: “The London Underground PPP is unique and we do not anticipate any negative impact on the UK PPP market as a whole to arise as a result of Metronet’s administration.”
Balfour Beatty has reached financial close on £350m of other PPP deals in the first half, with “major opportunities” in the pipeline in transport, health and education, through the Government’s Building Schools for the Future programme.
The company’s civil engineering business increased operating profits by 30% to £26m after a £550m deal to upgrade electricity networks in eastern England, as well as a new engineering contract with Yorkshire Water.
The recovery of the firm’s rail business continued with increased renewals for Network Rail.
Other opportunities are seen in Birmingham and Reading since the Government unveiled plans to invest £10bn in rail between 2009 and 2014.