Balfour Beatty ‘unaffected’ by HS2 setbacks in optimistic trading update
Balfour Beatty said on Thursday it expects higher annual revenues, driven by HS2 volumes in the UK and increased major airport activity in Hong Kong.
The infrastructure giant, which has contracts to work on HS2’s Old Oak Common section and London’s Picadilly Line, forecast a five per cent jump in revenue on 2022’s £9.3bn.
Underlying profit is expected to be broadly in line with last year’s £232m figure, while the year-end order book will come in “marginally higher” than the £16.4bn reported at the half-year mark.
Balfour said work on Old Oak Common, which the government plans to use as an alternate terminus for HS2 while Euston station is held back, continues to “progress well”.
Its order book was unaffected by the government’s decision to cancel the Northern leg of the route, which had yet to be contracted, the group added.
Balfour has benefitted from a slew of UK infrastructure contracts over the last year, including £43m to deliver upgrade works on London Underground’s Picadilly Line and a £330m six-year extension on its highways maintenance contract with Lincolnshire County Council.
Operational performance at Gammon, the FTSE250 firm’s Hong Kong business, remained strong amid a slew of investment into major airport infrastructure projects in the region.
US construction also benefitted from a stronger order intake in the second half, reflecting two commercial real estate projects in Texas totalling $800m and $300m of additional Federal work in Washington DC.
Leo Quinn, Balfour Beatty Chief Executive, said: “Balfour Beatty’s solid performance has continued in the second half of the year and the Board remains confident that the Group will achieve our expectations for the full year.”
Shareholders have benefitted from bumper dividends and a share buyback programme, totalling £595m since the start of 2021.
“We are pleased to confirm our fourth successive year of share buybacks in 2024, as our large order book, unique capabilities and balance sheet, provide a strong platform for continuing future shareholder returns,” Quinn said.