12th Dec 2019 08:48
(Alliance News) - Balfour Beatty PLC said Thursday it expects annual profit to be "slightly" ahead of its own expectations and in line with 2018.
Shares in the FTSE 250-listed construction firm were up 4.3% in London on Thursday morning at 240.20 pence each. They had hit 248.00p just after the open.
Balfour said its group profit for the year will be in with the year prior, of GBP205 million, following additional Infrastructure Investment disposals in the second half.
"All earnings based businesses - UK Construction, US Construction and Support Services - are expected to achieve industry standard margins for the full year 2019," the construction firm added.
Group revenue for the current year is expected to be 5% higher than the GBP7.8 billion recorded the year before.
On top of this, Balfour said its 2019 average monthly net cash flow is expected to be about GBP310 million, ahead of the previously guided GBP280 million to GBP300 million range.
Balfour said its year-end order book will be "in excess" of GBP14 billion, ahead of the GBP12.6 billion seen at the end of 2018.
Chief Executive Leo Quinn said: "We expect to deliver another year of profitable managed growth in 2019. The growing order book and strong balance sheet demonstrate our progress in positioning the group well to deliver increased value to shareholders."
Within UK Construction, Balfour said it continues to make good progress, achieving industry standard margins in the range of 2% to 3%.
In US Construction, profit is expected to increase, with its industry margin guided to improve but be within the standard range of between 1% and 2%. "The rate of progress achieved by the Buildings business has been partially offset by the Civils business," Balfour added.
The company's 50%-owned joint venture in Hong Kong, Gammon, is expected to deliver a "strong" performance, with profit rising from last year's GBP23 million. Balfour noted the venture has not been affected by the civil unrest in the city.
Within Support Services, annual profit will be in line with the prior year, at GBP46 million, but with the industry margin improving with the 3% to 5% industry standard range.
"Strong performance in Transportation has been offset by Utilities, which, as expected, will earn lower revenues than the prior year," the firm said.
Balfour added: "The group has a diverse portfolio operating across three geographies, UK, US and Hong Kong and three core sectors, Construction Services, Support Services and Infrastructure Investments. Despite short term political uncertainties, the long term trading environment for Balfour Beatty's Construction Services and Support Services markets and capabilities remains favourable, and the Infrastructure Investments market allows the group to maximise value as and when opportunities arise."
By Paul McGowan; [email protected]
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