Revenues up at Balfour Beatty

By Helen Wright07 March 2011

Ian Tyler, Balfour Beatty chief executive

Ian Tyler, Balfour Beatty chief executive

Revenues at Balfour Beatty rose +2% in 2010 to £ 10,5 billion (€ 12,2 billion) as growth overseas was offset by weak construction markets in the UK and US.

Pre-tax profit fell -29% year-on-year to £ 187 million (€ 218 million), but the UK contractor - which generates half its revenues overseas - was upbeat on emerging market prospects.

Balfour said its international reach had been "greatly enhanced" in recent years, particularly through its acquisition of US professional services group Parsons Brinckerhoff for US$ 626 million (€ 446 million) in 2009.

Chief executive Ian Tyler has been quoted as saying said the company was specifically eyeing expansion opportunities in China.

A focus on China would offset challenging conditions in Europe and the US. Indeed, Balfour said it did not expect "meaningful recovery" in the UK and US infrastructure markets in the short term.

Building markets in these regions are "likely to remain difficult" in 2011, according to the company. In the UK, Balfour said it expected reductions in public sector spending to be offset by long-term spending on energy and other civil infrastructure projects. The company also forecasts £ 3 billion (€ 3.5 billion) in UK public private partnership infrastructure opportunities over the next two years.

Balfour said it expected its US performance to decline in 2011, constraining profitability in its construction services division. A gradual decline in the volume of federal work is, however, forecast to be partly offset by a recovery in private construction investment over the long term.

The company said its order book at the end of 2010 reached £ 15,2 billion (€ 17,7 billion), up +8% against 2009.

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