13th Mar 2019 09:23
LONDON (Alliance News) - Balfour Beatty PLC on Wednesday hiked its dividend for 2018 as profit rose steadily alongside the achievement of industry-standard margins, despite a drop in revenue.
For the year, the FTSE 250-listed infrastructure group reported a 10% increase in pretax profit to GBP181 million from GBP165 million in 2017, due to improvements in the group's earnings-based businesses.
Profit from operations, or PFO, rose to GBP205 million from GBP196 million.
Namely, the UK Construction, US Construction and Support Services businesses reported their underlying PFO margins in line with industry standards by the second half of the year.
UK Construction had an underlying PFO margin of 2.4%, within the target of 2% to 3%.
US Construction's PFO margin was 1.5%, in line with the industry standard range of 1% to 2%, however Support Services was ahead of its target at 5.2%, versus the target range of 3% to 5%.
Revenue for 2018 dropped by 5% to GBP7.81 billion from GBP8.26 billion the prior year, due to a managed reduction in the order book during 2017.
At the end of 2017, Balfour Beatty's order book was GBP11.4 million, down from GBP12.4 billion in 2016 after the group "rebased" it to create an order book of "higher quality".
At the end of 2018, Balfour Beatty's order book was up 11% to GBP12.6 billion.
Excluding joint ventures, revenue still dropped by 4.1% to GBP6.63 billion from GBP6.92 billion.
Balfour Beatty declared a final dividend of 3.2 pence per share, bringing the total payout to 4.8p, up 33% from 3.8p the year before.
Looking ahead, the group said it is confident of performing in line with market expectations for 2019.
"These results demonstrate the value being created through Build to Last. We continue to strengthen the group and meet our targets. The businesses are back at industry standard margins, underpinned by a strong balance sheet and asset base," said Chief Executive Leo Quinn.
"But Balfour Beatty's transformation goes well beyond resolving the issues of forced growth. We have relentlessly invested in capability and leadership to forge a culture which provides sustainable competitive advantage through standardisation of our systems and processes, on a reducing overhead base," Quinn added.
Shares in Balfour Beatty were up 1.3% at 289.50 pence on Wednesday.
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