14th Mar 2018 08:58
LONDON (Alliance News) - FTSE 250-listed Balfour Beatty PLC said Wednesday that profit expanded in 2017 after costs fell as it focuses attention on a smaller but higher-quality order book and progresses towards achieving industry-standard margins by the end of 2018.
In 2017, pretax profit widened to GBP117 million from GBP10 million the year prior. This was despite revenue - including joint ventures - shrank to GBP8.26 billion from GBP8.37 billion the year before. Excluding joint ventures, revenue remained broadly flat at GBP6.92 billion from GBP6.92 billion the year before.
Profit was helped by a fall in operating expenses to GBP299 million from GBP381 million the year before.
At the end of 2017 the order book stood at GBP11.4 billion, down from GBP12.4 billion the year prior. This is after Balfour "rebased" it after creating a "higher quality" order book.
Balfour ended the year with GBP335 million in net cash. This was up from GBP173 million net cash in 2016.
Balfour proposed a 2.4 pence per share final dividend, up from 1.8p the year prior. For the full year, the dividend grew to 3.6p from 2.7p the year before.
"These results clearly demonstrate that our Build to Last programme is transforming Balfour Beatty," Balfour Beatty Chief Executive Officer Leo Quinn said. "The group has been repositioned to drive sustainable growth in profits, underpinned by a strong balance sheet. It has the right culture and capabilities to capitalise on the rising tide of infrastructure spend in our chosen markets."
"As a result of Build to Last," Quinn added, "and the governance and controls now in place, we remain on track to achieve industry-standard margins in the second half of 2018. In the medium term, we are building a group capable of delivering market-leading performance."
By the end of 2018, Balfour is targeting margins of between 2% and 3% for UK construction, 1% and 2% for US construction and 3% to 5% for support services. In 2017 margins stood at 0.8% for UK and 1.1% for US construction as well as 3.9% for support services.
Shares in Balfour were 1.8% higher at 281.80 pence on Wednesday.
Related Shares:
Balfour Beatty
