Strong first half performance for Balfour Beatty

Balfour Beatty has reported strong half-year results and remains on track to meet its full-year expectations. 

The infrastructure group said revenue for the six months ending June 30 rose 9% to £4.5bn, up from £4.1bn in 2022. 

Pre-tax profit was marginally reduced to £82m, from £83m in 2022.

The company said “positive momentum” had continued during the first half in its UK Construction business. 

Strong delivery contributed to a 67% increase in underlying profit from operations. 

Half-year-figures showed revenue in Balfour Beatty’s UK Construction division increased by 23% to £1,516m (2022: £1,237m)

Balfour Beatty is working on major infrastructure projects in the UK including including HS2. 

In March the Department for Transport announced delays to parts of the HS2 project and various highways schemes. 

But Balfour Beatty has taken it in its stride. In today’s results it said: “Having worked through the change order on HS2 and rebalanced the workload, the group sees no material change to its forecasts.”

The company is also working on Hinkley Point C, where the marine work is progressing well and remains on schedule to be completed in the second half of 2023.

Balfour Beatty also reported strong growth prospects across its Support Services business. 

Focussing on power, plant, road and rail maintenance, it said the business was underpinned by long-term contracts. 

In the first half, the road maintenance business commenced both of its key 2022 awards, with the £176m eight-year contract for highways services for Buckinghamshire County Council starting in April and the £297m seven-year contract for the maintenance of highways assets and the delivery of infrastructure services across East Sussex starting in May.

It also said its power business continues to perform strongly, delivering key transmission and distribution infrastructure throughout the UK.

The UK Government has announced a programme to accelerate the delivery of strategic transmission upgrades by at least three years, with an ambition to cut delivery times in half, due to the necessity of upgrading the UK’s electricity transmission and distribution network. 

As a result, the group’s power transmission and distribution team is bidding for record levels of work and was recently selected as one of ten preferred bidders on SSEN Transmission’s £10bn Accelerated Strategic Transmission Investment (ASTI) framework.

Leo Quinn, Balfour Beatty group chief executive, said: “We continue to deliver from the scale and breadth of our lower risk order book, which, during this period of high inflation and interest rates, underpins the financial results reported today and our expectations for the full year.

“Looking beyond 2023, we have positioned Balfour Beatty strongly with unique capabilities and a sector-leading balance sheet, to capitalise on national plans to transform critical infrastructure, particularly in the energy and transport markets. 

“This provides the board with confidence in both profitable managed growth and in our capacity to deliver significant future shareholder returns.”