13th Jan 2005 07:00
Balfour Beatty PLC13 January 2005 13 January 2005 BALFOUR BEATTY PLC ================== Trading Update -------------- Balfour Beatty plc, the engineering, construction and services group, isproviding this update on trading for the year ended 31 December 2004 in advanceof its preliminary results announcement on 9 March 2005. In 2004, Balfour Beatty's principal markets in healthcare, education, road andrail transport and utility systems continued to deliver significantopportunities. During the year, the Group's order book has grown substantiallyto approximately £6.5 billion, with approximately £1 billion of furtherconstruction work at preferred bidder stage. It is anticipated that growth in Group profits and earnings for the year, beforeexceptional items and goodwill amortisation, will be in line with expectations.Operating cashflow performance was again very satisfactory and year-end net cashwill be approximately £300 million. Sectors------- In Building, Mansell, which was acquired at the end of 2003, performed atanticipated levels and continued to grow, particularly in social housing. Thismore than offset profits forgone as a result of the sale of Andover Controls atthe half year. Elsewhere in the building sector, performance was good and orderintake continued at very satisfactory levels, with a number of substantialcontracts and preferred bidder positions secured, including major new PPPschools and healthcare projects in Birmingham, Scotland, Nottinghamshire andYorkshire. In Engineering, performance in the UK was good. Particularly encouragingprogress was made in utilities contracting, where major new projects have beensecured in both the gas and water sectors, and in road management andmaintenance, where RCS won the £300 million Highways Agency Area 2 EnhancedManaging Agent Contractor contract late in the year. In the US, furthersubstantial costs were incurred in the second half of the year on the residualportions of some contracts in the heavy marine engineering business. Our USbusiness has now been reorganised and the heavy marine engineering business isbeing closed. The associated costs of these actions will be fully accounted forin 2004. The acquisition of 50% of Gammon in Hong Kong and the acceleratingdevelopment of the Dubai market, where we have a strong presence, providefurther opportunities for long-term future growth. In Rail, the maintenance contracts taken in-house by Network Rail were settledon satisfactory terms. A significantly larger share of the mainline renewalsprogramme was secured in new contracts awarded by Network Rail early in the yearand the renewals workload for the London Underground is now increasing sharply.Our UK projects, plant and track systems businesses also performed well. Therewere losses in Balfour Beatty Rail Inc and the business has been reorganised anddownsized as a result. The carrying value of this business is under review.There was also some weakness in the German market, but major projects in Italy,Portugal and elsewhere in Europe progressed well. In Investments, there has been very satisfactory progress, with the acquisitionof 100% ownership of Connect Roads, a first full year of Metronet profits and astrong recovery in profits in Barking Power. In this latter context, asettlement in respect of the administration of TXU Europe is anticipated during2005. Preferred bidder status was achieved for five new PPP schemes - hospitalsat Birmingham and Pinderfields in Yorkshire through Consort Healthcare andschools schemes at North Lanarkshire, Nottinghamshire and Birmingham throughTransform Schools. Andover Controls---------------- There will be an exceptional profit of approximately £120 million arising fromthe disposal of Andover Controls. Outlook------- We believe that our trading environment will continue to be healthy during 2005and that we will continue to generate secure, sustainable income from ourpartnerships with customers in both the public and private sectors. We anticipate that the Group will make further progress in 2005. ENDS Enquiries to: Tim Sharp Tel: 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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