Balfour Beatty plc (LON:BBY) reported first half underlying revenue of $4.1bn, broadly flat year-on-year.
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However, operating profits came in at £60m, up from a £14m loss in 2020. That reflects good cost control, gains on disposals of investments and improved results in the group’s joint venture partners.
The board declared an interim dividend of 3.0p, up 43% on its pre-pandemic level. The group has also completed £100m of its planned £150m share buyback programme.
Balfour Beatty shares fell 3.5% in early trading.
Balfour Beatty's Losses On London Property Construction Contracts
Nicholas Hyett, Equity Analyst at Hargreaves Lansdown:
“Losses on London property construction contracts mean Balfour’s UK construction business has not made any progress year-on-year. Given the group was struggling with the complete closure of the construction industry 12 months ago that’s a particularly poor result. In future the group will avoid fixed-price residential property contracts in central London altogether. That may avoid repeats of past blunders, but it continues a trend of Balfour restricting where it operates. So long as there’s enough work to do in its remaining markets that’s no bad thing, but construction is a notoriously fickle business and work quickly dries up when the economy takes a turn for the worse.
Elsewhere there’s more positive news. Margins are expected to continue improving in Support Services, demand for the group’s infrastructure assets from institutional buyers remains solid and that’s underpinning a sizeable hike in the dividend to above pre-pandemic levels.
A firm grip on costs and cash means Balfour Beatty’s not in a bad place at the moment, but further progress rests on winning and executing new profitable construction contracts. It’s been a while since the group was able to do that reliably.”
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