In a trading update to shareholders today, Balfour Beatty said its 2018 results would be better than expected due to an additional infrastructure investments sale in December.
The board said: “The group continues to drive fundamental transformation under the Build to Last programme, as evidenced by the fact that it expects to deliver on its key phase two targets, with all earnings based businesses successfully achieving industry standard margins for the second half of 2018.”
Balfour Beatty also continues to strengthen its balance sheet. In December, it paid down the remaining convertible bonds, delivering a 45% reduction in the gross debt over the last 12 months. Net cash at year-end is expected to be broadly in line with the previous year, with 2018 average monthly net cash now forecast at £18m5, ahead of the previous £140m to £170m guidance range.
The forecast year-end order book is around £12bn, up from £11.4bn at the start of the year.
The loss-making and delayed Aberdeen Western Peripheral Route project is expected to reach full completion before the end of December, although legal rows about claims continue.
Chief executive Leo Quinn said: “We are on track to deliver our Build to Last Phase Two goal of achieving industry standard margins in all earnings based businesses in the second half of 2018.
“The actions we have taken since the start of 2015 have created a strong foundation for the future. We have consistently invested in our capabilities, systems and leadership while de-risking the business, strengthening the balance sheet and selectively building the order book.
“Going forward, we aim to drive market leading performance by using the disciplines we have instilled to translate Balfour Beatty’s expert capabilities into long term profitable growth.”
Balfour Beatty’s plans to published its full 2018 results on 13th March 2019.