12th Aug 2020 09:25
(Alliance News) - Balfour Beatty PLC on Wednesday chose not to pay an interim dividend as it swung to a loss in the first half of 2020, with Covid-19 hurting all operations, with Construction the hardest hit.
For the six months ended June 26, the FTSE 250 infrastructure group reported a pretax loss of GBP26 million, compared to a profit of GBP63 million for the same period a year before.
Balfour Beatty made a loss from operations of GBP16 million compared to a profit of GBP71 million, as Covid-19 had a material impact on Construction services. In the UK, London had reduced productivity as public transport availability affected employees and subcontractors, while the South region was hit by the almost entire shutdown of aviation.
Construction in the US also was badly affected by the pandemic, as contractual recoveries were reassessed on a number of projects.
Revenue however, increased by 6% year-on-year to GBP4.12 billion from GBP3.88 billion, due to higher volumes in US Construction and Gammon, Balfour's equal joint venture with Jardine Matheson Holdings Ltd. This growth more than offset a decline in Support Services, due to lower utility volumes as contracts in the gas & water business complete.
As at June 26, the group's order book stood at GBP17.5 billion, up 22% from GBP14.3 billion at the end of 2019, driven by the addition of over GBP3 billion of HS2 contracts following the issue of the notice to proceed in April for the high-speed rail link between London and Birmingham.
Balfour Beatty has suspended its interim dividend, but is looking to reinstate it "as soon as is appropriate".
"Since the Covid-19 crisis broke, our mission has been to safely manage through it while protecting the group's strengths. That meant balancing the needs of all our stakeholders. We have kept sites open wherever safe to do so, prioritised supply chain payments and supported staff," said Chief Executive Officer Leo Quinn.
"The financial impacts of Covid-19 are unavoidable; but they will pass. Since the start of Build to Last, our balance sheet, order book and expert capability are at record levels. We look forward with confidence to returning to profitable managed growth, and to delivering ongoing value for all our stakeholders," Quinn added.
Shares in Balfour Beatty were down 4.3% at 250.54 pence on Wednesday in London.
By Dayo Laniyan; [email protected]
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