Balfour Beatty to sell infrastructure assets
By Chris Sleight02 December 2010
Balfour Beatty has announced plans to sell off UK£ 200 - UK£ 300 million (US$ 330 - US$ 495 million) worth of infrastructure assets over the next five years. It will use the cash generated to invest in new schemes and increase dividends.
"As our investment portfolio becomes more mature, we are evolving our approach to the way we deploy capital to investments," the company said in a statement. "We intend to use the cash proceeds to develop new assets and to deliver returns to shareholders in the form of an increment to dividends."
"Over the long term, we expect global infrastructure markets to grow owing to the need to replace ageing infrastructure in developed countries, and to meet the demands of economic growth and demographic trends in emerging countries," the company added.
Balfour Beatty is in the early stages of setting up an infrastructure funds management business, which will be headed by Rob Gregor, a former head of European infrastructure at AMP Capital Investors. The proposed fund will be focused on core economic infrastructure and will be chaired by Andy Friend, a former CEO of Laing plc. Balfour Beatty will be an investor in the fund.
The company also said it expected to improve its operating profit margin to 3.5% to 4% over the next five years through better utilisation of resources, particularly in its Professional Services division, and through previously announced efficiency savings.