Balfour Beatty maintains interim dividend, on track for full year

(Sharecast News) - Infrastructure giant Balfour Beatty reported a solid first-half performance on Wednesday, particularly in its earnings-based businesses, as it remained on target to meet its full-year expectations. The FTSE 250 company reported a 9% improvement in revenue year-on-year, to £4.5bn, while underlying profit from operations for its earnings-based businesses jumped 12% to £95m.

However, group profit from operations overall dipped 6% due to the timing of disposals and a decrease in profit from infrastructure investments.

Balfour Beatty's underlying profit before tax was up 13%, and underlying earnings per share grew to 13p per share - a minor rise from 12.9p in the first six months of 2022.

The company said its construction services segment's profit from operations rose 33% to £65m, as its margin increased to 1.7% from the previous 1.4%.

The support services segment experienced a decline of 17% in profit from operations, wth margins sliding to 6.5% from 7.2%, although the full-year margin was expected to be at the higher end of the 6% to 8% range.

Balfour Beatty said the valuation for infrastructure investments remained consistent at £1.3bn, unchanged from the figure reported at the end of the 2022 financial year.

Financially, the firm said a £150m share buyback was set to be finalised in the fourth quarter, while it had committed to distributing a total of £58m in dividends in 2023, with the dividend for the first half sustained at 3.5p per share.

The company reported average net cash of £695m for the period, down from £804m in 2022.

Looking ahead, Balfour Beatty said its sizable and lower-risk order book stood at £16.4bn, down from £17.4bn at the end of 2022, solidifying its short- to medium-term outlook.

"We continue to deliver from the scale and breadth of our lower risk order book, which, during this period of high inflation and interest rates, underpins the financial results reported today and our expectations for the full year," said group chief executive officer Leo Quinn.

"Looking beyond 2023, we have positioned Balfour Beatty strongly with unique capabilities and a sector-leading balance sheet, to capitalise on national plans to transform critical infrastructure, particularly in the energy and transport markets.

"This provides the board with confidence in both profitable managed growth and in our capacity to deliver significant future shareholder returns."

Reporting by Josh White for Sharecast.com.