For the year to 31st December 2020, Balfur Beatty made a pre-tax profit of £48m (2019: £138m) on revenue up 2% £8,593m (2019: £8,411m).
However, the UK construction order book doubled during the year and there was a strong cash performance.
For the first half of the year, Balfour Beatty reported a loss from operations, then partially recovered in the second half of the year with all segments recording a profit resulting in a full year underlying profit from operations of £51m (2019: £221m).
The fall in profits was largely due to Covid-19, both directly and indirectly. UK Construction recorded a £26m loss for the year as site closures, lower productivity, additional operating costs and lengthening site programmes all had an impact. Additionally, the investments division deferred planned sales of infrastructure investment assets until markets pick up.
There was a strong cash performance with average net cash at £527m (2019: £325m), which was ahead of previous guidance. The year-end net cash balance was £581m (2019: £512m). “The best measure of long-term business resilience is cash performance,” said chief executive Leo Quinn.
“This performance was achieved despite the impact on profit from Covid-19, while maintaining Balfour Beatty's key strengths and delivering a record £16.4bn order book at year end. With its strong balance sheet, medium term visibility and market outlook, the group now has enhanced capacity to drive cash generation through earnings growth and restarting disposals of investments assets,” he added.
Balfour Beatty’s worldwide order book at year end increased by 15% to £16.4bn (2019: £14.3bn), or roughly two years of revenue. Over the last three years, the order book has increased 45%, driven by public sector infrastructure projects in the UK, US and Hong Kong.
The UK construction order book stands at £6.4bn up from £3.0bn at the start of the year, thanks largely to HS2 giving Balfour Beatty its biggest ever contract, building the northern section of phase one in joint venture with Vinci, as well as the London station at Old Oak Common.
Balfour Beatty’s accounts also show a £2m credit for release of provisions that had previously been set aside for blacklisting claims.
Chief executive Leo Quinn said: “Throughout the pandemic, we have protected the group’s strengths, supported our stakeholders and held firm to our disciplines. That we achieved this while exceeding our own targets for net cash demonstrates Balfour Beatty’s resilience and the dedication of our people and partners.
“Our leading positions in large growing infrastructure and construction markets, record year end order book and £1.1bn investments portfolio provide confidence in future cash generation. This underpins our new capital allocation framework which demonstrates Balfour Beatty’s commitment to deliver enhanced returns to shareholders.”