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Sun July 03 2022

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Balfour Beatty reports healthy UK construction margins

12 May Balfour Beatty reports that it is on target to deliver UK construction margins of between 2% and 3% this year.

Chief executive Leo Quinn
Chief executive Leo Quinn

In a trading update ahead of its annual general meeting today, Balfour Beatty said that overall trading has been in line with expectations so far this year.

The order book stood at £15.6bn at the end of March, down £500m from three months before.

Over the first four months of 2022, the average monthly closing net cash balance increased to around £800m although the monthly average for the full year will be a little lower than this – but up on 2021’s monthly average of £671m.

Within Construction Services, operational performance is in line with expectations despite some continuing Covid-19 related restrictions in Hong Kong. US Construction is anticipated to deliver a 1-2% margin for the 2022 full year. UK Construction remains on track to deliver industry standard margins of 2-3% for the 2022 full year, the board said.

The Support Services are in line with the margin target of 6-8%, albeit on a lower revenue base having left the gas and water sector. The rail business recently agreed a £120m programme of work for Network Rail as part of the 10-year Central Rail Systems Alliance track renewals programme.

Group chief executive Leo Quinn said: “We remain confident that the group is well positioned for 2022 and beyond. Our business portfolio has been transformed to focus on the growing infrastructure markets of the UK, US, and Hong Kong – each underpinned by strong government investment programmes. The strength of our balance sheet and the higher quality of our order book will enable us to maximise these opportunities for profitable growth while remaining resilient to the current macro-economic challenges.”

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