12th Jan 2007 07:00
Balfour Beatty PLC12 January 2007 12 January 2007 BALFOUR BEATTY PLC ================== TRADING UPDATE ============== Balfour Beatty plc, the international engineering, construction and servicesgroup, is providing this update on trading for the year ended 31 December 2006in advance of its preliminary results announcement on 7 March 2007. It is anticipated that performance for the year will be in line withexpectations. In 2006, Balfour Beatty's leading positions in its principal markets ofhealthcare, education, road and rail transport, utility systems, privatelyfinanced projects and social housing continued to offer substantial opportunity.During the year, the Group's order book grew by some 20% to approximately £9billion. The future earnings potential of the Group was further enhanced by acquisitionsin the US building, UK rail and UK civil engineering sectors and by successesfor our investment business in the education, healthcare and airport sectors. Operating cash flow was, again, very satisfactory. SECTORS======= Building-------- In the building sector, progress has been good. Our building constructionbusinesses improved their overall performance despite the impact of some issuesrelated to the delivery programme under the London Underground PPP which alsohad an effect in the engineering sector. In building services, markets andperformance have remained strong. In facilities management, we secured over £650million of potential new work during the year, including major new long-termcontracts for the Department for Work and Pensions and the Metropolitan Police.Heery in the US continued to grow successfully following the acquisition ofCharter. We anticipate a number of preferred bidder positions on major PPPcontracts to be converted to contract during the current financial year. Engineering----------- Performance in the engineering sector continued to improve, with good progressin the electricity, gas and water utility businesses. During the year we wereappointed preferred partner for the £550 million Eastern Electricity Alliance byNational Grid. There were also good performances in professional services, roadmanagement and maintenance and the Group's joint ventures in Hong Kong and Dubaiwhere major project work progressed well. There were further reorganisationcosts in Balfour Beatty Construction Inc in the US, although underlyingperformance is on an improving trend. In civil engineering, good progress hasbeen made in regional contracting and on three of the Early ContractorInvolvement road schemes for the Highways Agency. A £115 million contract forthe Northern Ticket Hall at Kings Cross Station was secured. Birse, the UKregional civil engineering contractor was acquired in July and its integrationinto the group has proceeded well. Rail---- In the rail sector, there was a strong recovery in the second half following arelatively weak first half year. While revenues from work on the UK overgroundnetwork were flat, good progress was made on rail projects for BAA at HeathrowTerminal 5 and for Metronet on the London Underground where the completerefurbishment of the Waterloo and City line was completed successfully. In theUS, performance improved following last year's second-half losses and theinternational rail electrification business made good progress, particularly inGermany and Italy. The modernisation of the Metro System in Porto wassuccessfully completed. In October, the group was awarded the £363 millioncontract for the new East London Line. Investments----------- Very satisfactory progress was made in the investments sector. Both theBirmingham Hospital and Birmingham Schools PPP projects reached financial close.Balfour Beatty Capital was successful in securing preferred bidder status onExeter Airport, an acquisition completed in early January, and for the Knowsley,Merseyside, Building Schools for the Future project. The hospital projects inManchester and Pinderfields which are at preferred bidder stage, moved forwardsatisfactorily. Progress on the Metronet concessions continued to be mixed andsubstantial changes to the procurement and delivery system are in the process offinalisation. PPP businesses have now been established in Germany, Hong Kong/Singapore, and the US, where we have been shortlisted for the Oakland AirportConnector project. Barking Power had a very good year, with high availability and a favourableprice regime. OUTLOOK------- Trading prospects in our key sectors remain positive. We anticipate that theGroup will continue to make good progress in 2007. ENDS Enquiries to:-------------Tim SharpTel: 020 7216 6884 www.balfourbeatty.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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