Balfour Beatty has reported that its forward order book has reached £13.7bn, in a trading update ahead of its preliminary results announcement on 4 March.
The firm said said its balance sheet and financial position remain strong, with average net cash for the second half of the year being in excess of £300m.
The update continued: “The acquisition of Parsons Brinckerhoff ("PB") in October last year was the realisation of a number of key strategic objectives and has given the Group significantly enhanced capabilities and presence across the entire life cycle of major infrastructure assets.”
Balfour Beatty said from now on it would report the Group’s business in four segments, in line with the business model it has created. The segments are construction services, professional services, support services and infrastructure investments.
Segment performance
Balfour Beatty said: “Construction Services has had a particularly strong year with good performances from the building businesses, especially in the US.
“Recent wins include two new infrastructure contracts in Hong Kong for Gammon Construction, worth £180m to the joint venture, construction activities arising from the expansion of an existing military housing concession at Fort Bliss in the US and financial close on the Blackburn with Darwen and Bolton Councils Building Schools for the Future scheme.
“Professional Services has been transformed by the acquisition of PB and integration work has continued to proceed well, including the integration of Heery in the US and Balfour Beatty Management in the UK.
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“Our existing professional services business performed well in the year but the overall result will be impacted by the seasonal nature of PB's profit profile. There will be a full-year contribution from PB in 2010.
“Support Services, which comprises our utilities, facilities management, rail renewals and highways maintenance activities, has performed well in the year, and with recent wins finishes the year with a strong future order book.
“We have recently announced a seven-year contract to provide integrated facilities management services to QinetiQ and our utilities business has secured new AMP 5 capital programme contracts with United Utilities and Anglian Water worth in the region of £600m in total.
“The pipeline of bidding activity in Infrastructure Investments in the UK remains strong. Earlier this week, we announced that we had reached financial close on the £450m Blackburn with Darwen and Bolton Councils Building Schools for the Future (BSF) programme.
“In the US, we are looking at a number of specific areas outside military housing where there is demand for financing, designing and constructing infrastructure assets. We have recently reached financial close on an expansion of an existing military housing concession with the US Army at Fort Bliss.”
Balfour Beatty concluded: “We have benefited in 2009 from continued expenditure in infrastructure markets and finish the year with a strong order book.
“The breadth of our portfolio, enhanced by the acquisition of Parsons Brinckerhoff, means our Group is resilient and we remain confident about the prospects for the Group overall, in spite of the economic uncertainties in some of our markets.”
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