UK-based contractor Balfour Beatty has been given reason to feel confident about the future after performing well in the first half of 2017, with growth in both revenue and profit.
The group’s underlying profit from operations was said to be on track to achieve full-year expectations, rising from £11 million (€12.1 million) in the first half of 2016 to £39 million (€42.9 million) in the first half of this year. This was backed by positive cash flow from operations.
Net cash stood at £161 million (€177 million), while average net cash was £45 million (€49.5 million) in the first half of 2017, without material investment disposals.
Underlying revenue was up 8% – or 1% at constant exchange rates (CER) – on the first half of 2016, reaching £4.2 billion (€4.62 billion).
The director’s valuation of the group’s investments portfolio was up 1% at £1.24 billion (€1.36 billion).
Leo Quinn, group chief executive, said, “These results demonstrate the transformation being driven by focusing Balfour Beatty relentlessly on its chosen markets and capabilities.”
In terms of operational highlights, Balfour Beatty exited the Middle East as part of its continued efforts to simplify and focus its activities.
The order book at the end of the second half of 2017 was £11.4 billion (€12.53 billion), which represented an 8% (6% CER) drop. This was said to be the result of selective bidding that delivered higher margins and reduced risk.
The group’s infrastructure pipeline in the US and the UK was said to remain buoyant. Of particular significance were the two HS2 contracts awarded to the Balfour Beatty Vinci joint venture in July, with a value of around £2.5 billion (€2.75 billion).
Quinn said, “All of this gives us confidence that the Group remains on track to achieve industry-standard margins in the second half of 2018.”