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RNS Number : 9218V
Balfour Beatty PLC
07 December 2023
News Release
7 December 2023
BALFOUR BEATTY 2023 TRADING UPDATE
On track to deliver full year expectations
Balfour Beatty, the international infrastructure group, today
provides a trading update covering the period to 7 December
2023.
Financial Update
-- Order book at year end expected to be marginally higher than
GBP16.4 billion reported at half year.
-- 2023 revenue expected to be about 5% ahead of prior year
(FY2022: GBP8.9 billion) driven by higher HS2 volumes in the UK and
increased major airport project activity in Hong Kong.
-- Underlying profit from operations from earnings-based
businesses expected to be broadly in line with the prior year
(FY2022: GBP232 million).
-- 2023 gain on Infrastructure Investment disposals of GBP26
million, in line with prior GBP15 - 30 million guidance.
-- 2023 average monthly net cash continues to be expected in a range of GBP650 - GBP700 million.
Operational Update
Construction Services: US Construction has had a stronger order
intake in the second half of the year than the first. This reflects
two commercial real estate projects in Texas totalling $800 million
converting from awarded to contracted and $300 million of
additional Federal work in Washington DC.
In the UK, the HS2 works at Area North and Old Oak Common
continue to progress well. The Group's order book was unaffected by
the Government's decision to cancel HS2 Phase 2, which had yet to
be contracted.
In Hong Kong, operational performance at Gammon remains strong
in a period of volume growth, which has been driven by the increase
of work at the major airport projects.
Support Services: The Group has had further success in its local
roads business, signing a six-year extension worth GBP330 million
to the highways maintenance contract with Lincolnshire County
Council. In October, the rail business was awarded a GBP43 million
contract to deliver essential upgrade works on the London
Underground's Piccadilly line. In August, the Group's power
transmission and distribution team was selected as one of ten
preferred bidders on SSEN Transmission's c. GBP10 billion
Accelerated Strategic Transmission Investment (ASTI) framework.
From 2024, Balfour Beatty are expecting orders in the power
business to expand, as the industry positions itself to deliver the
infrastructure upgrades required to facilitate the UK Government's
Net Zero ambitions.
Infrastructure Investments: Balfour Beatty has disposed of two
assets, both in the second half year of the year, for a combined
gain on disposal of GBP26 million, in line with prior expectations
for 2023 gains on disposal of GBP15 - 30 million. The proceeds from
each sale are in excess of the Balfour Beatty Directors' valuation
as of 30 June 2023, with total consideration of GBP60 million. 2023
investment in new and existing projects is expected to be around
GBP45 million.
Capital allocation framework
Balfour Beatty continues to deliver attractive total cash
returns to shareholders while maintaining an appropriate balance
between investment in the business, and a strong capital position.
Once the 2023 share buyback programme completes this month, GBP595
million will have been distributed to shareholders through share
buybacks and dividends since the start of 2021. From January, the
Group intends to buy back further shares ahead of confirming the
amount for its 2024 share buyback at the Group's full year results
in March.
Quote
Leo Quinn, Balfour Beatty Group Chief Executive, said: "Balfour
Beatty's solid performance has continued in the second half of the
year and the Board remains confident that the Group will achieve
our expectations for the full year.
"We are pleased to confirm our fourth successive year of share
buybacks in 2024, as our large order book, unique capabilities and
balance sheet, provide a strong platform for continuing future
shareholder returns."
ENDS
Analyst/investor enquiries:
Jim Ryan
Tel. +44 (0)7858 368527
Jim.Ryan@balfourbeatty.com
Media enquiries:
Antonia Walton
Tel. +44 (0)203 810 2345
antonia.walton@balfourbeatty.com
-- Balfour Beatty is a leading international infrastructure
group with 25,000 employees driving the delivery of powerful new
solutions, shaping thinking, creating skylines and inspiring a new
generation of talent to be the change-makers of tomorrow.
-- We finance, develop, build, maintain and operate the
increasingly complex and critical infrastructure that supports
national economies and deliver projects at the heart of local
communities.
-- Over the last 114 years we have created iconic buildings and
infrastructure all over the world. Currently, we are working to
deliver Hinkley Point C, the first UK nuclear power station in a
generation; constructing the world-class arts and cultural
facility, the Lyric Theatre, in Hong Kong; and designing, building,
financing, operating and maintaining the Automated People Mover
superstructure at the fifth busiest airport in the world, Los
Angeles International Airport.
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END
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December 07, 2023 02:00 ET (07:00 GMT)
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