First half profit tumbles at Balfour Beatty
14 August 2013
Weak results from Balfour Beatty’s construction services division helped drag the contractor’s underlying net profit down 70% year-on-year in the first half to £45 million (€52.5 million).
Group revenue dropped 3% year-on-year to £4.97 billion (€5.8 billion), but the order book was up 7% since 28 June, 2013, to £13.9 billion (€16.2 billion) at the same point this year.
The construction services business – the largest division by revenues – reported a net operating loss of £41 million (€47.9 million) on revenues of £3.15 billion (€3.68 billion), down 5% year-on-year.
Balfour Beatty said a difficult external environment combined with internal reorganisation had resulted in a poor performance from its UK construction business.
But the company reported more positive results from its overseas operations. The construction order book was up 9% from the end of 2012 to £8 billion (€9.34 billion), fuelled by contract wins in Hong Kong and the US.
Indeed, Balfour Beatty said its US order book was now 30% bigger than the UK order book which, in contrast, reduced 6% since the year-end.
“Having gone into the downturn about 18 months before the UK, the US market is at a different stage of its cycle,” Balfour Beatty said.
“Federal spending is still very constrained, and state and local governments are only slowly breaking free of the paralysis caused by their weaker financial positions. But, the private market is seeing a rebound.”
Looking ahead, Balfour Beatty said, “Our markets continue to be challenging, but our actions are delivering the intended results. With sustained focus on operational delivery, we expect to achieve a performance in our continuing operations that is in line with the current market expectations for 2013.”