By Guy Taylor
Balfour Beatty’s profit fell in 2023 as the infrastructure giant flagged a “challenging” macroeconomic backdrop.
Underlying pre-tax profit dipped year-on-year from £291m to £261m, while operating profit also came in lower, at £228m.
The order book for the group, which has contracts to work on HS2’s Old Oak Common and London’s Picadilly Line, narrowed 5 per cent to £16.5bn.
Leo Quinn, Balfour Beatty’s chief executive, said Balfour’s resilience against a “challenging economic backdrop” was driven by “disciplined contract risk management across a geographically and operationally diversified portfolio.
Revenues rose 7 per cent to £9.6bn, propped up by Hong Kong’s “buoyant” construction market, where the firm’s Gammon segment reported a 27 per cent jump in revenue.
“The current pipeline of infrastructure projects is driven by the Hong Kong government’s drive to increase connectivity within the Greater Bay Area, as it announced three new strategic railways and three new major roads,” Balfour Beatty said.
In the UK, the group said its order book had been “unaffected” by the government’s decision to scrap the northern leg of HS2 in October.
Its top brass recommended an increased final dividend of 11.5p, up from 10.5p in 2022.
The company now expects to return a total of £160m to shareholders in 2024, boosted by the repurchase of £100m shares as part of its multi-year buyback programme.
“The board remains confident in Balfour Beatty’s ongoing ability to deliver sustainable cash generation for significant shareholder returns, with growth from our earnings-based businesses in 2024 underpinned by the strength of the group’s order book,” Quinn said.
“Looking to 2025 and beyond, we expect our unique capabilities and complex infrastructure project experience to drive further earnings growth, with attractive opportunities being pursued in the UK energy, transport and defence markets and in the US.”
