Balfour Beatty rallies as it lifts dividend, announces £100m buyback

(Sharecast News) - Infrastructure group Balfour Beatty surged on Wednesday despite posting a drop in full-year profit, as it lifted its dividend, announced a £100m share buyback and struck an optimistic note on the outlook. In the year to the end of December 2023, pre-tax profit fell to £244m from £287m a year earlier, with the company pointing to lower gains on investment disposals, as guided. Revenue was up 7% at £9.6bn.

The order book fell to £16.5m from £17.4bn a year earlier.

But shares in the firm were up 8% at 366.90p at 0900 GMT as investors welcomed a buyback and increased dividend.

The board recommended a final dividend of 8p per share, giving a total for the year of 11.5p, up from 10.5p in 2022. In addition, Balfour said it plans to buy back up to £100m of shares during the 2024 phase of its multi-year share buyback programme.

This brings the cumulative return to shareholders since the introduction in 2021 of the multi-year capital allocation framework to more than £750m.

Chief executive Leo Quinn said: "The group's reliability and resilience has again delivered a solid performance, with increased revenue and profit from our earnings-based businesses and strong operating cash flow.

"This success against a challenging economic backdrop is driven by our disciplined contract risk management across a geographically and operationally diversified portfolio.

"The board remains confident in Balfour Beatty's ongoing ability to deliver sustainable cash generation for significant shareholder returns, with growth from our earnings-based businesses in 2024 underpinned by the strength of the group's order book. Looking to 2025 and beyond, we expect our unique capabilities and complex infrastructure project experience to drive further earnings growth, with attractive opportunities being pursued in the UK energy, transport and defence markets and in the US."