Balfour Beatty’s UK construction revenue dipped in the first half of the year, though the contractor\u2019s worldwide turnover ticked up.<\/p>\n
Half-year results released this morning (14 August) show UK construction turnover stood at \u00a31.46bn in the six months to 28 June 2024, down from \u00a31.52bn in the same period in 2023.<\/p>\n
However, its underlying profit margin grew from 2 to 2.3 per cent, as underlying profit rose from \u00a330m to \u00a334m.<\/p>\n
Worldwide revenue rose from \u00a34.5bn to \u00a34.7bn, driven by a \u00a391m increase in its support services business and \u00a3131m growth at Hong Kong subsidiary Gammon.<\/p>\n
Balfour<\/a>\u2019s total pre-tax profit was \u00a3112m, up from \u00a382m in the same period last year.<\/p>\n On an underlying basis, profit from total operations dropped from \u00a380m to \u00a377m due to increased infrastructure investment costs, which it put down to capitalised bidding costs. It was also hit by continued fallout from the fraud that its US subsidiary pleaded guilty to in late 2021. Some of its employees submitted false information showing it had hit maintenance and resident satisfaction targets at several military housing projects<\/a> from 2013-2019.<\/p>\n As well as paying a \u00a349m fine at the time, the company agreed to take part in independent compliance monitoring for three years.<\/p>\n Today\u2019s results cite this monitoring as having increased costs in relation to its military housing work and hitting underlying profit.<\/p>\n Chief executive Leo Quinn was upbeat about the future, saying the firm had secured work that will drive profitable growth in 2025 and beyond.<\/p>\n He said: \u201cThe outlook for the group\u2019s chosen growth markets, where we hold unique capabilities in delivering complex infrastructure projects, remains encouraging, including in the UK with the new government reinforcing commitments to critical national infrastructure.<\/p>\n \u201cBalfour Beatty\u2019s prospects across these markets provide the board with confidence that the group will continue to deliver significant and attractive shareholder returns in the coming years.\u201d<\/p>\n He added: \u201cThe new Labour government has committed to grow the UK economy and has highlighted proposed investment in energy and transport infrastructure, the leveraging of private investment, planning reform and upskilling the UK\u2019s workforce as key components of their plan to achieve this.<\/p>\n \u201cIt has also pledged to increase defence spending over time. This direction of travel is positive for Balfour Beatty in the medium term.\u201d<\/p>\n The group\u2019s average net cash increased in the period to \u00a3735m, compared with \u00a3695m in the first half of 2023.<\/p>\n Adrian Lunn, director at property agency Eddisons, said: \u201cLooking ahead, Balfour looks to be pretty confident and it has an intensely diversified portfolio of ongoing projects, which should stand it in good stead as the current uncertainty continues.\u201d<\/p>\n