The Courier & Advertiser (Perth and Perthshire Edition)
Restructured Balfour Beatty in black
Under pressure infrastructure giant Balfour Beatty has moved back into the black.
Pre-tax profit came in at £8 million in the 12 months to December 31, compared with a £199m loss in 2015 last year after the firm was held back by onerous construction contracts that delivered poor returns.
Underlying revenue rose 4% to £8.5 billion as the group, which has a range of interests from transport, to energy, water and infrastructure, saw its order book grow by 15% to £12.7bn.
The group’s improved performance is proof that Build to Last, a major restructuring programme taken forward under chief executive Leo Quinn, is starting to provide dividends.
“The transformation of Balfour Beatty is well under way,” Mr Quinn said.
“We have returned the group to profit and significantly exceeded our Build to Last phase one targets. All this positions us for future profitable growth.”
Balfour Beatty is involved in various projects in Scotland including a high-profile contract to provide a new railway station concourse for Dundee.
The £28m project, which includes construction of a new hotel and mixed use concourse area, is expected to complete in the second half of this year.
The group was also boosted by its biggest US contract win to date last year, a £524m deal to electrify 52 miles of railway tracks in California.
The deal is being hailed for pushing open the door to the American marketplace as President Donald Trump prioritises infrastructure spending.
In an investor update yesterday, Balfour added: “The trading environment in the group’s core UK and US markets remains positive.
“In the UK, government policy is helping to drive a strong pipeline of major infrastructure projects in transport and energy.
“In the US, the new administration has made infrastructure one of its key priorities.
“This positive market backdrop supports the group’s commitment to be more selective, targeting contracts with improved profitability and cash flow dynamics.”