10th Mar 2021 08:49
(Alliance News) - Balfour Beatty PLC on Wednesday recorded a fall in profit for 2020; however it did propose a final dividend for the year.
The London-based infrastructure firm's 2020 revenue rose 2.1% to GBP8.59 billion from GBP8.41 billion in 2019, just above the company's expectations of a figure in line with the previous year.
Pretax profit tumbled to GBP48 million in 2020 from GBP138 million in 2019. The company said the significant fall in profit was due to a combination of the pandemic, a reassessment of end-of-contract forecasts in Construction Services, and the decision to defer any disposals from Infrastructure Investments, given prevailing market conditions.
Balfour Beatty's year-end order book stood at GBP16.4 billion, an increase of 15% from GBP14.3 billion in 2019. This is just below company expectations of GBP17 million.
Balfour added that it will repay the GBP19 million it claimed under the UK government's furlough scheme during 2020. It said the scheme provided "welcome and timely support", but it made the decision to voluntarily refund the full amount, noting it will be a non-underlying cost in its 2021 results.
However, Sky News reported on Tuesday that the repayment comes days after a warning from an unnamed "major" investor body that it would recommend voting against boards that paid bonuses to executives last year if they had taken government money during the pandemic.
The company recommended a dividend of 1.5 pence per share for 2020, having paid no interim dividend. For comparison, it paid 2.1p for 2019. Balfour also has decided to extend its share buyback programme to GBP150 million for 2021.
Shares in Balfour Beatty were flat at 291.80p in London on Wednesday.
"Throughout the pandemic, we have protected the group's strengths, supported our stakeholders and held firm to our disciplines. That we achieved this while exceeding our own targets for net cash demonstrates Balfour Beatty's resilience and the dedication of our people and partners. Our leading positions in large growing infrastructure and construction markets, record year-end order book and GBP1.1 billion investments portfolio provide confidence in future cash generation. This underpins our new capital allocation framework which demonstrates Balfour Beatty's commitment to deliver enhanced returns to shareholders," said Chief Executive Leo Quinn.
Looking ahead, Balfour Beatty said its operations recovered steadily through the second half of 2020, and expects that Construction Services and Support Services will deliver underlying profit from operations in 2021 in line with 2019.
"For 2022 and beyond, the strength of the group's order book and positive infrastructure markets creates the capacity to drive profitable managed growth and sustainable cash generation," it said.
Balfour Beatty shares were down 0.3% at 291.00 pence early Wednesday in London.
By Zoe Wickens; [email protected]
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