Balfour Beatty profits slip
18 August 2011
Balfour Beatty reported a 9% drop in first half gross profits to £91 million (€104 million) due to competitive market conditions and a reduction in government funded projects in the UK and US.
Revenues for the period increased 1% to £5.2 billion (€6 billion), and the company's order book rose to £15.5 billion (€17.7 million) from £14.6 billion (€16.7 million) at June 2010.
The company said UK infrastructure markets were being hit by reduced government spending, while the delay in the re-authorisation of the six-year transportation bill in the US, coupled with a lack of bank financing in commercial markets, was adversely affecting its business.
Shifting focus
The UK-based contractor has started cost reduction initiatives and is shifting its focus to where it sees opportunities. For example, the company acquired US contractors Howard S Wright and Fru-Con in separate transactions during the first six months of the year - deals which expanded the group's presence in the pre-construction and wastewater infrastructure markets respectively.
The company also highlighted strong growth in Australasia, as well as opportunities in the Middle East presented by governments of countries such as Qatar, Kuwait and Saudi Arabia which are looking to upgrade their national infrastructure.
Chief executive Ian Tyler said, "Although there are significant challenges in many of our markets, we have planned and structured our business to address these challenges, and we are confident of making progress this year.
"Looking ahead, we will continue to manage the business on the basis that market conditions will remain tough. We expect recovery in our markets in the medium term, and we have positioned ourselves to take advantage of the growing demand longer-term for infrastructure across the globe."
