11th Jan 2006 07:00
Balfour Beatty PLC11 January 2006 11 January 2006 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 2005 in advanceof its preliminary results announcement on 8 March 2006. In 2005, Balfour Beatty's leading positions in its principal markets ofhealthcare, education, road and rail transport, utility systems,privately-financed projects and social housing continued to generate significantopportunity. During the year, the Group's order book grew by 13% from £6.8billion to approximately £7.7 billion, with approaching £1.2 billion more workat preferred bidder stage, including, most notably, the £520 million BirminghamHospital PFI project. Operating cash flow was again very satisfactory. It is anticipated that performance in 2005 will be in line with expectations. There is likely to be a net exceptional profit. The receipt of initialdistributions by Barking Power from the administrators of TXU Europe and thegain on disposal of a 15% interest in three PFI road schemes will be partlyoffset by costs arising from the purchase of preference shares and the costs ofrepaying a term loan and settling a legacy legal issue in the US. Sectors------- In Building, there was another good performance from Mansell and satisfactoryprogress in other operating companies, including Balfour Beatty Constructionwhose profits have recovered strongly in the second half following the contractlosses which were reported at the interim results. Order intake in the buildingsector has strengthened further in the year with the conversion to contract ofPPP schools projects in Scotland and Nottinghamshire and a wide range of othersuccesses in the social housing, accommodation, healthcare and commercialsectors. In Engineering, progress has been very satisfactory with particularly strongperformances from RCS, the road manager and maintainer, and Balfour Beatty PowerNetworks. Results in Balfour Beatty Construction Inc in the US showedsignificant improvement following the closure of its heavy marine engineeringdivision. During the year, order books grew substantially, with a number ofmajor long-term contract wins in the UK utilities and roads sectors and forGammon in Hong Kong. In Rail, performance was good in the UK and in the international railelectrification business, but reflected a first full year without UK maintenanceprofits and the continued impact of contract difficulties in the US. There wereencouraging contract wins for a further section of the West Coast Main Lineupgrade, a major rail link in Australia and for the continuing provision oftrack plant machines to Network Rail. Activity levels under major track renewalcontracts for Network Rail and under the London Underground PPP weresatisfactory. In Investments, performance has continued to be good following the major stepforward made in 2004. During 2005, new concessions came on stream for the M77motorway in Scotland, major schools schemes in North Lanarkshire and Bassetlawand a street lighting scheme on Tyneside. Financial close is anticipated in 2006for the Birmingham Hospital and Birmingham Schools schemes and for thePinderfields & Pontefract and the Northern Batched hospitals schemes. Theoperational performance of Metronet was broadly satisfactory. Plans are in handto address delays in the capital expenditure programme, most particularly instations upgrade. In two separate transactions, the Group's shareholding in the Edinburgh RoyalInfirmary concession was increased from 42.5% to 73.9% and a 15% interest inthree of Connect Roads' projects, previously 100% owned, was sold. Outlook------- We believe that our trading environment will continue to be healthy during 2006and that the Group will make further progress during the year. ENDS Enquiries to:Tim SharpTel: 020 7216 6884www.balfourbeatty.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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