Balfour Beatty reports ‘solid’ performance in full-year results

Infrastructure group Balfour Beatty has reported a 7% rise in revenue to £9.6bn as it announced its annual results. 

Underlying profit from operations (PFO) from earnings-based businesses was up 2% in the year ending December 31, 2023 to £236m. But -pre-tax profits were down almost 15% to £244m compared to £287m in 2022. 

The company’s UK Construction operations saw underlying profit increase to £69m, up from £59m in 2022, driven by higher revenue and improved project delivery.  Revenue rose 10% to £3.03bn compared to £2.76bn in 2022.

The UK Construction order book remained flat at £6.1bn, with 91% of those orders from public sector and regulated industry clients. 

UK Construction currently has around 700 live projects in the portfolio, which is slightly higher than in recent years. 

During 2023, work was completed on a wide range of projects including the Mayfield Retirement Village in Watford, the Forder Valley link road and bridge in Plymouth, the National Treatment Centre Highland Hospital in Inverness and the Institute for Regeneration and Repair at the University of Edinburgh. 

New projects which started in the year included a new building at the AWE Aldermaston site near  Reading, civils work at Devonport Dockyard in Plymouth, the Central Rhyl Coastal Defence scheme in North Wales and the Dunfermline Learning Campus for Fife College.

In addition to projects started in the year, work added to the order book in 2023 included the £300m West Slope student accommodation development a Sussex University, which is a Balfour Beatty Infrastructure Investments project, and a £67m contract for a replacement Liberton High School in Edinburgh.

Leo Quinn, Balfour Beatty group chief executive, said: “The group’s reliability and resilience has again delivered a solid performance, with increased revenue and profit from our earnings-based businesses and strong operating cash flow. 

“This success against a challenging economic backdrop is driven by our disciplined contract risk management across a geographically and operationally diversified portfolio.

“The board remains confident in Balfour Beatty’s ongoing ability to deliver sustainable cash generation for significant shareholder returns, with growth from our earnings-based businesses in 2024 underpinned by the strength of the group’s order book. 

“Looking to 2025 and beyond, we expect our unique capabilities and complex infrastructure project experience to drive further earnings growth, with attractive opportunities being pursued in the UK energy, transport and defence markets and in the US.”