REG - Balfour Beatty PLC - BALFOUR BEATTY 2023 TRADING UPDATE

Balfour BeattyAnnouncement

07/12/2023 07:00

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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 £16.4
billion reported at half year.

·    2023 revenue expected to be about 5% ahead of prior year (FY2022:
£8.9 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: £232 million).

·    2023 gain on Infrastructure Investment disposals of £26 million, in
line with prior £15 - 30 million guidance.

·    2023 average monthly net cash continues to be expected in a range of
£650 - £700 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 £330 million to the highways
maintenance contract with Lincolnshire County Council. In October, the rail
business was awarded a £43 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. £10 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 £26
million, in line with prior expectations for 2023 gains on disposal of £15 -
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 £60
million. 2023 investment in new and existing projects is expected to be around
£45 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, £595 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
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 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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