1st Jun 2020 10:35
(Alliance News) - Balfour Beatty PLC on Monday cancelled its 2019 final dividend payout, but said it will proceed in its repurchase of GBP112 million worth of preference shares.
The FTSE 250-listed construction company said that while the first quarter of 2020 was "strong", the Covid-19 pandemic and the subsequent government-enforced lockdown has had "a material impact" on financial performance across all divisions.
Balfour Beatty said that majority of projects in its Construction unit remained operational. In April, 78% of its sites across the UK and US were open. In May, while 83% of sites were open and 17% were closed, 17% of the operational sites experienced "significant disruption" due to the availability of employees, subcontractors or materials. Scotland and London are the worst-hit in the UK, while Washington state and Florida have been hurt the most in the US.
While the Support Services division has been negatively affected by Covid-19, some of the employees were designated as key workers and the unit experienced only "limited closures," the company said.
In Infrastructure Investments, operations in the UK have continued as normal supported by the government advice that PFI contractors are part of the public sector response to Covid-19. Due to current market uncertainty, and its "strong" liquidity position, Balfour Beatty did not dispose of any significant Infrastructure Investment assets in the first five months of 2020. It advised that it will only resume disposals when market conditions return to normal.
Looking ahead, Chief Executive Leo Quinn said: "These remain challenging and uncertain times. Our priority will always be the safety and health of all our employees, customers, partners and the public. Build to Last has made Balfour Beatty a resilient organisation with a high-quality order book and a strong balance sheet. As we navigate the group through this exceptional year, we will maintain our focus on the longer term to ensure we are ready to capitalise fully on the significant opportunities in our chosen markets."
As at last Wednesday, Balfour Beatty had net cash of GBP452 million and GBP375 million of undrawn facilities. Its order book as at the end of April was GBP17.4 billion.
The company said that while it has cancelled the 4.3 pence per share final dividend for 2019, it has given notice to holders of its cumulative convertible redeemable preference shares to redeem the shares in full at 100p per share together with accrued interest to the date of repayment on July 1.
Separately, Balfour Beatty said its postponed annual general meeting will now be held on June 25.
The stock was trading 2.5% lower at 244.40p each on Monday morning in London.
By Ife Taiwo; [email protected]
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