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Sun June 13 2021

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Balfour's UK construction business set to avoid red ink

14 May 13 Following up its recent profits warning, Balfour Beatty has issued a first-quarter interim management statement confirming a £50m shortfall in its UK construction operations.

Balfour Beatty saw its UK construction revenue decline by 11% in the first quarter. Despite this, the division is expected to break even in the full year and avoid dipping into a loss.

The company said that there had been no change in performance since the trading update on 29 April 2013, when new chief executive Andrew McNaughton stepped in to take over day-to-day running of the UK construction business to sort it out.

Trading in our other businesses remains in line with prior expectations despite a £10m shortfall in the German rail business.

The order book of £16.0bn at the end of March was 5% up since the year-end.

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 The Professional Services order book has improved during the quarter, giving the business a healthy workload to execute through the year.

The Construction Services order book also increased, thanks to the USA and Hong Kong, but the overall position in UK construction was flat.

The board said: “As we progress through the year, our business is expected to benefit from the cost efficiency programmes we have in place, a recovery in operational performance in UK construction and the ongoing implementation of strategic initiatives. Based on these dynamics and the first half weighting of the profit shortfall in UK construction, we expect our profits to be more heavily skewed to the second half than in previous years.

“We remain confident that the strategy we have set out for the medium term will transform Balfour Beatty into an increasingly diverse and international business which is better positioned to benefit from structural growth in infrastructure markets with less cyclical characteristics.”

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