Balfour Beatty profits more than double to £196m

Galtero Lara
Marcha 14, 2018

Balfour Beatty has revealed its full-year group results for 2017, showing a pre-tax profit which has more than doubled from the previous year to £148m, contributed to by a significant turnaround in the fortunes of its United Kingdom construction division, which has moved back into profit.

Underlying revenue was flat at £8.2bn and fell by 3% at constant exchange rates.

Shares rose 2.4% to 283.6p in morning trade.

The company received £103mln from the sale of a 12.5% stake in Connect Plus, which operates the M25 London orbital motorway.

Over the coming year, Balfour said that it expects its construction services and support services businesses to "continue their positive trajectory to achieve industry-standard margins". Today, it said the M25 partial sales were in line with its strategy to maximise value from its investments portfolio.

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Balfour Beatty, which has offices and schemes on site across the North West, has been working through chief executive Leo Quinn's "build to last" recovery plan since the company's profit dropped dramatically by £350m in 2014, due to 89 problem contracts.

Cash remains the most "important barometer of financial performance" for Balfour Beatty, and during the year it had average net cash of £42m; at year end, it had net cash of £335m.

Balfour Beatty has overhauled operations, in a turnaround dubbed "Build to Last", after losses at its British construction division led to multiple profit warnings.

It had joint ventures with Carillion on the Aberdeen Western Peripheral Route, the A14 in Cambridgeshire and junctions on the M60 and M62, and Balfour said it was likely to have a cash impact between £35m and £45m.

"The group has been repositioned to drive sustainable growth in profits, underpinned by a strong balance sheet".

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