REG - Balfour Beatty PLC - Balfour Beatty PLC Half-Year Results 2017 <Origin Href="QuoteRef">BALF.L</Origin> - Part 2
16/08/2017 07:06
- Part 2: For the preceding part double click ID:nRSP0957Oa
weighted average discount
rate is 8.0% (2016: 8.2%). The fall in weighted average discount is due to a number of investments moving from the
construction phase into the operations phase. A 1% change in the discount rate would change the value of the North American
portfolio by approximately £71 million.
OTHER FINANCIAL ITEMS
Non-underlying items
The Group believes non-underlying items should be separately identified on the face of the income statement to assist in
understanding the underlying financial performance achieved by the Group.
Non-underlying items from continuing operations before tax of £10 million were charged to the income statement in the first
half of 2017 (2016: £28 million). Items included £5 million of restructuring costs incurred relating to the Group's Build
to Last transformation programme. A further £5 million was charged to non-underlying relating to the amortisation of
acquired intangible assets.
Taxation
The Group's underlying loss before tax from continuing operations, excluding share of joint ventures, of £8 million (2016:
£13 million) resulted in an underlying tax charge of £nil (2016: £7 million credit). The tax position principally arises
due to a tax charge in the US offset by a tax credit in the UK. Under IFRS tax accounting rules, these figures have been
calculated without taking account of the proposed UK law changes to restrict the offset of brought forward losses to 50% of
current year profits and to limit the ability to offset interest expense for tax purposes. These proposals will be
re-introduced into Parliament in the autumn and, assuming they are passed as currently intended, they will have
retrospective effect to 1 April 2017, and hence, impact our 2017 full-year results. Therefore, it is expected that the
second half 2017 taxation charge will be higher than the first half.
Discontinued operations
The Group has presented its 49% interests in its Middle East joint ventures as discontinued operations in the first-half of
the year, with comparatives restated accordingly. Following the completion of the sale in March 2017, the Group recorded a
non-underlying gain on disposal of £5 million in the first-half of the year.
Pension
The Group's balance sheet includes aggregate deficits of £208 million (FY 2016: £231 million) for pension schemes. The
decrease in pension deficit in the period is due to a small reduction in life expectancy based on the latest mortality
studies, together with cash deficit payments made by the company, partially offset by a small reduction in corporate bond
yields. In the largest scheme, Balfour Beatty Pension Fund, the programme of hedging against changes in interest rates and
inflation projections has continued to decrease volatility and provide significant benefit.
Borrowing facilities
Balfour Beatty's committed borrowing facility totals £400 million. The purpose of this syndicated revolving credit facility
is to provide liquidity from a set of core relationship banks to support ongoing activities. The Group completed its
refinancing in December 2015 with the facility extending through to 2018. In November 2016, £375 million of the facility
was extended until December 2019. A further one-year extension, through to 2020, is available, subject to bank approval. At
30 June 2017, this facility was undrawn.
Responsibility statement
We confirm that to the best of our knowledge:
· the condensed Group financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting;
· the interim management report, as required by Disclosure and Transparency Rules 4.2.7R and 4.2.8R, includes a fair review
of:
o important events during the half-year ended 30 June 2017 and their impact on the condensed Group financial statements;
o a description of the principal risks and uncertainties for the second half of the year; and
o related parties' transactions and changes therein.
On behalf of the Board
Leo Quinn Phil Harrison
Group Chief Executive Chief Financial Officer
15 August 2017
Forward-looking statements
This announcement may include certain forward-looking statements, beliefs or opinions, including statements with respect to
Balfour Beatty plc's business, financial condition and results of operations. These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "anticipates",
"targets", "aims", "continues", "expects", "intends", "hopes", "may", "will", "would", "could" or "should" or, in each
case, their negative or other various or comparable terminology. These statements are made by the Balfour Beatty plc
Directors in good faith based on the information available to them at the date of this announcement and reflect the Balfour
Beatty plc Directors' beliefs and expectations. By their nature these statements involve risk and uncertainty because they
relate to events and depend on circumstances that may or may not occur in the future. A number of factors could cause
actual results and developments to differ materially from those expressed or implied by the forward-looking statements,
including, without limitation, developments in the global economy, changes in UK and US government policies, spending and
procurement methodologies, and failure in Balfour Beatty's health, safety or environmental policies.
No representation or warranty is made that any of these statements or forecasts will come to pass or that any forecast
results will be achieved. Forward-looking statements speak only as at the date of this announcement and Balfour Beatty plc
and its advisers expressly disclaim any obligations or undertaking to release any update of, or revisions to, any
forward-looking statements in this announcement. No statement in the announcement is intended to be, or intended to be
construed as, a profit forecast or profit estimate or to be interpreted to mean that earnings per Balfour Beatty plc share
for the current or future financial years will necessarily match or exceed the historical earnings per Balfour Beatty plc
share. As a result, you are cautioned not to place any undue reliance on such forward-looking statements.
MEASURING OUR PERFORMANCE
Providing clarity on the Group's alternative performance measures
Following the issuance of the Guidelines on Alternative Performance Measures (APMs) by the European Securities and Markets
Authorities (ESMA) in June 2015, the Group has included this section in its half-year statement with the aim of providing
transparency and clarity on the measures adopted internally to assess performance.
Throughout this report, the Group has presented performance measures which are considered most relevant to the Group and
are used to measure the Group's performance on a day-to-day basis. These measures are chosen to provide a balanced view of
the Group's operations and are considered useful to investors as these measures provide relevant information on the Group's
past or future performance, position or cash flows.
The APMs adopted by the Group are also commonly used in the sectors it operates in and therefore serve as a useful aid for
investors to compare Balfour Beatty's performance to its peers.
The Board believes that disclosing these performance measures enhances investors' ability to evaluate and assess the
underlying financial performance of the Group's continuing operations and the related key business drivers. These financial
performance measures are also aligned to measures used internally to assess business performance in the Group's budgeting
process and when determining compensation.
Equivalent information cannot be presented by using financial measures defined in the financial reporting framework alone.
Readers are encouraged to review the half-year financial statements in their entirety.
Performance measures used to assess the Group's operations in the period
Underlying profit from operations (PFO)
Underlying PFO is presented before finance cost and interest income and is the key measure used to assess the Group's
performance in the Construction Services and Support Services segments. This is also a common measure used by the Group's
peers operating in these sectors.
This measure reflects the returns to the Group from services provided in these operations that are generated from
activities that are not financing in nature and therefore an underlying pre-finance cost measure is more suited to
assessing underlying performance.
Underlying profit before tax (PBT)
The Group assesses performance in its Infrastructure Investments segment using an underlying PBT measure. This differs from
the underlying PFO measure used to measure the Group's Construction Services and Support Services segments because in
addition to margins generated from operations, there are returns to the Investments business which are generated from the
financing element within its projects.
These returns take the form of subordinated debt interest receivable and interest receivable on PPP financial assets which
are included in the Group's income statement in investment income. These are then offset by the finance cost incurred on
the non-recourse debt associated with the underlying projects, which is included in the Group's income statement in finance
costs.
Measuring the Group's performance
The following measures are referred to in this half-year financial statements when reporting performance, both in absolute
terms and also in comparison to earlier years:
Statutory measures
Statutory measures are derived from the Group's reported financial statements, which are prepared in accordance with the
International Financial Reporting Standards (IFRSs) as adopted by the EU and as issued by the International Accounting
Standards Board (IASB).
Where a standard allows certain interpretations to be adopted, the Group has applied its accounting policies consistently.
These accounting policies can be found on pages 112 to 118 of the Group's 2016 Annual Report and Accounts.
The Group's statutory measures take into account all of the factors, including those that it cannot influence (principally
foreign currency fluctuations) and also large non-recurring items which do not reflect the ongoing underlying performance
of the Group (refer to section (b)).
Performance measures
In assessing its performance, the Group has adopted certain non-statutory measures because, unlike its statutory measures,
these cannot be derived directly from its financial statements. The Group commonly uses the following measures to assess
its performance:
a) Order book
The Group's disclosure of its order book is aimed to provide insight into its pipeline of work and future performance. The
Group's order book is not a measure of past performance and therefore cannot be derived from its financial statements.
The Group's order book comprises the unexecuted element of orders on contracts that have been secured. Where contracts are
subject to variations, only secured contract variations are included in the reported order book.
Where contracts fall under framework agreements, an estimate is made of orders to be secured under that framework
agreement. This is based on historical trends from similar framework agreements delivered in the past and the estimate of
orders included in the order book is that which is probable to be secured.
b) Underlying performance
The Group adjusts for certain non-underlying items which the Board believes assist in understanding the performance
achieved by the Group. These items include:
− gains and losses on the disposal of businesses and investments, unless this is part of a programme of releasing value
from the disposal of similar businesses or investments such as infrastructure concessions
− costs of major restructuring and reorganisation of existing businesses
− acquisition and similar costs related to business combinations such as transaction costs
− impairment and amortisation charges on intangible assets arising on business combinations (amortisation of acquired
intangible assets). These are non-underlying costs as they do not relate to the underlying performance of the Group.
From time to time, it may be appropriate to disclose further items as non-underlying items in order to reflect the
underlying performance of the Group.
The results of Rail Germany and certain legacy ES contracts have been treated as non-underlying items as the Group is
committed to exiting these parts of the business.
Further details of these non-underlying items are provided in Note 7.
A reconciliation has been provided below to show how the Group's statutory results are adjusted to exclude significant
items that are non-recurring and their impact on its statutory financial information, both as a whole and in respect of
specific line items.
Reconciliation of the half-year ended 30 June 2017 statutory results to performance measures
2017 first half unaudited Build Intangible Results of Rail Germany Other 2017 first half unaudited
statutory to Last restructuring costs amortisation £m £m performance
results £m £m measures
£m £m
Continuing operations
Revenue including share of joint ventures and associates (performance) 4,201 - - (10) - 4,191
Share of revenue of joint ventures and associates (657) - - 2 - (655)
Group revenue (statutory) 3,544 - - (8) - 3,536
Cost of sales (3,376) - - 8 - (3,368)
Gross profit 168 - - - - 168
Amortisation of acquired intangible assets (5) - 5 - - -
Other net operating expenses (164) 5 - - - (159)
Group operating profit/(loss) (1) 5 5 - - 9
Share of results of joint ventures and associates 30 - - - - 30
Profit/(loss) from operations 29 5 5 - - 39
Investment income 20 - - - - 20
Finance costs (37) - - - - (37)
Profit/(loss) before taxation 12 5 5 - - 22
Taxation 2 - (2) - - -
Profit for the period from continuing operations 14 5 3 - - 22
Profit for the period from discontinued operations 6 - - - (5) 1
Profit for the period 20 5 3 - (5) 23
Reconciliation of half-year ended 30 June 2017 statutory results to performance measures by segment
Profit/(loss) from operations 2017 first half unaudited Build Intangible Results of Rail Germany Other 2017 first half unaudited
statutory to Last restructuring costs amortisation £m £m performance
results £m £m measures
£m £m
Segment
Construction Services 20 2 2 - - 24
Support Services 16 - - - - 16
Infrastructure Investments 12 - 3 - - 15
Corporate activities (19) 3 - - - (16)
Total 29 5 5 - - 39
Reconciliation of the half-year ended 1 July 2016 statutory results to performance measures
2016 first half unaudited Build Intangible Provision increases/ Gains on disposal £m Results Results of Rail Germany Other 2016 first half unaudited
statutory to Last restructuring costs amortisation (releases) of ES £m £m performance
results+ £m £m £m £m measures+
£m £m
Continuing operations
Revenue including share of joint ventures and associates (performance) 3,976 - - - - (5) (88) - 3,883
Share of revenue of joint ventures and associates (653) - - - - - 4 - (649)
Group revenue (statutory) 3,323 - - - - (5) (84) - 3,234
Cost of sales (3,225) - - - - 9 77 - (3,139)
Gross profit 98 - - - - 4 (7) - 95
Gain on disposals of interests in investments 52 - - - - - - - 52
Amortisation of acquired intangible assets (4) - 4 - - - - - -
Other net operating expenses (189) 9 - 16 (6) - 6 2 (162)
Group operating loss (43) 9 4 16 (6) 4 (1) 2 (15)
Share of results of joint ventures and associates 26 - - - - - - - 26
(Loss)/profit from operations (17) 9 4 16 (6) 4 (1) 2 11
Investment income 40 - - - - - - - 40
Finance costs (38) - - - - - - - (38)
(Loss)/profit before taxation (15) 9 4 16 (6) 4 (1) 2 13
Taxation 8 (1) (1) - - (1) 2 - 7
(Loss)/profit for the period from continuing operations (7) 8 3 16 (6) 3 1 2 20
Profit for the period from discontinued operations (4) - - - (2) - - - (6)
Profit for the period (11) 8 3 16 (8) 3 1 2 14
+ Re-presented to classify the Group's 49% interests in Dutco Balfour Beatty LLC and BK Gulf LLC as discontinued
operations.
Reconciliation of the half-year ended 1 July 2016 statutory results to performance measures by segment
Profit/(loss) from operations 2016 first half statutory Build Intangible Provision increases/ (releases) Gains on disposal Results Results of Rail Germany Other 2016 first half performance
results+ to Last restructuring costs amortisation £m £m of ES £m £m measures+
£m £m £m £m £m
Segment
Construction Services+ (65) 5 1 5 (3) 4 (1) - (54)
Support Services (1) 1 - 11 - - - - 11
Infrastructure Investments 68 - 3 - (3) - - 2 70
Corporate activities (19) 3 - - - - - - (16)
Total (17) 9 4 16 (6) 4 (1) 2 11
+ Re-presented to classify the Group's 49% interests in Dutco Balfour Beatty LLC and BK Gulf LLC as discontinued
operations.
Reconciliation of the year ended 31 December 2016 statutory results to performance measures
2016audited Build Intangible Provision increases/ Gains on disposal £m Results Results of Rail Germany Other 2016 performance
statutory to Last restructuring costs amortisation (releases) of ES £m £m audited measures+
results+ £m £m £m £m £m
£m
Continuing operations
Revenue including share of joint ventures and associates (performance) 8,368 - - - - (3) (150) - 8,215
Share of revenue of joint ventures and associates (1,445) - - - - - 12 - (1,433)
Group revenue (statutory) 6,923 - - - - (3) (138) - 6,782
Cost of sales (6,639) - - - - 9 127 - (6,503)
Gross profit 284 - - - - 6 (11) - 279
Gain on disposals of interests in investments 65 - - - - - - - 65
Amortisation of acquired intangible assets (9) - 9 - - - - - -
Other net operating expenses (381) 14 - 31 (8) - 10 2 (332)
Group operating (loss)/profit (41) 14 9 31 (8) 6 (1) 2 12
Share of results of joint ventures and associates 58 - - (1) - - - - 57
Profit from operations 17 14 9 30 (8) 6 (1) 2 69
Investment income 75 - - - - - - - 75
Finance costs (82) - - - - - - - (82)
Profit before taxation 10 14 9 30 (8) 6 (1) 2 62
Taxation (8) (4) (3) - - - 3 - (12)
Profit for the year from continuing operations 2 10 6 30 (8) 6 2 2 50
Profit/(loss) for the year from discontinued operations 22 - - - (24) - - - (2)
Profit for the year 24 10 6 30 (32) 6 2 2 48
+ Re-presented to classify the Group's 49% interests in Dutco Balfour Beatty LLC and BK Gulf LLC as discontinued
operations.
Reconciliation of the year ended 31 December 2016 statutory results to performance measures by segment
Profit/(loss) from operations 2016 Build Intangible Provision increases/ (releases) Gains on disposal Results Results of Rail Germany Other 2016 performance
statutory to Last restructuring costs amortisation £m £m of ES £m £m measures+
results+ £m £m £m £m
£m
Segment
Construction Services+ (55) 12 3 19 (5) 6 (1) - (21)
Support Services 22 1 - 11 - - - - 34
Infrastructure Investments 83 - 6 - (3) - - 3 89
Corporate activities (33) 1 - - - - - (1) (33)
Total 17 14 9 30 (8) 6 (1) 2 69
+ Re-presented to classify the Group's 49% interests in Dutco Balfour Beatty LLC and BK Gulf LLC as discontinued
operations.
c) Underlying profit before tax
As explained, the Group's Infrastructure Investments segment is assessed on an underlying profit before tax (PBT) measure.
This is calculated as follows:
2017 first half unaudited 2016 first half unaudited 2016 year audited
£m £m £m
Underlying profit from operations (section (b) and Note 3) 15 70 89
Add: Subordinated debt interest receivable^ 12 15 29
Interest receivable on PPP financial assets^ 5 12 21
Less: Non-recourse borrowings finance cost^ (6) (12) (24)
Underlying profit before tax (Performance) 26 85 115
Non-underlying items (section (b) and Note 7) (3) (2) (6)
Statutory profit before tax 23 83 109
^ Refer to Note 5 and Note 6.
d) Underlying earnings per share
In line with the Group's measurement of underlying performance, the Group also presents its earnings per share on an
underlying continuing basis. The table below reconciles this to the statutory earnings per share.
Reconciliation from statutory EPS to performance EPS
2017 first half unaudited 2016 first half unaudited+ 2016 year audited+
£m £m £m
Statutory earnings/(loss) per ordinary share 2.9 (1.6) 3.5
Less: earnings/loss from discontinued operations (0.9) 0.3 (3.3)
Statutory earnings/(loss) per ordinary share from continuing operations 2.0 (1.3) 0.2
Amortisation of acquired intangible assets 0.4 0.5 0.9
Other non-underlying items 0.8 3.5 6.1
Underlying earnings per ordinary share from continuing operations (performance) 3.2 2.7 7.2
+ Re-presented to classify the Group's 49% interests in Dutco Balfour Beatty LLC and BK Gulf LLC as discontinued
operations.
e) Revenue including share of joint ventures and associates (JVAs)
The Group uses a revenue measure which is inclusive of its share of revenue generated from its JVAs. As the Group uses
revenue as a measure of the level of activity performed by the Group during the period, the Board believes that including
revenue that is earned from its JVAs better reflects the size of the business and the volume of work carried out and more
appropriately compares to PFO.
This differs from the statutory measure of revenue which presents Group revenue earned only from its subsidiaries.
A reconciliation of the statutory measure of revenue to the Group's performance measure is shown in the tables in section
(b). A comparison of the growth rates in statutory and performance revenue can be found in section (i).
f) Recourse net cash/borrowings
The Group also measures its performance based on its net cash/borrowings position at the period end. This is analysed using
only elements that are recourse to the Group and excludes the liability component of the Company's preference shares which
is debt in nature according to statutory measures. This is excluded from the Group's measure of net debt in line with the
definition of net debt in the covenants set out in the Group's facilities.
Non-recourse elements are cash and debt that are ringfenced within certain infrastructure concession project companies.
Net debt/cash reconciliation
2017 first half unaudited Adjustment 2017 first half unaudited 2016 first half unaudited Adjustment 2016 first half unaudited 2016 year audited Adjustment 2016 year audited
statutory £m performance statutory £m performance statutory £m performance
£m £m £m £m £m £m
Total cash within the Group 843 (154) 689 728 (25) 703 769 (7) 762
Cash and cash equivalents
- infrastructure concessions 154 (154) - 25 (25) - 7 (7) -
- other 689 - 689 703 - 703 762 - 762
Total debt within the Group (1,075) 547 (528) (1,100) 512 (588) (929) 340 (589)
Borrowings - non-recourse loans (446) 446 - (413) 413 - (240) 240 -
- other (528) - (528) (588) - (588) (589) - (589)
Liability component of preference shares (101) 101 - (99) 99 - (100) 100 -
Net (debt)/cash (232) 393 161 (372) 487 115 (160) 333 173
g) Average net cash/borrowings
The Group uses an average net cash/borrowings measure as this reflects its financing requirements throughout the period.
The Group calculates its average net cash/borrowings based on the average of opening and closing figures for each month
through the period.
The average net cash/borrowings measure excludes non-recourse cash and debt and the liability component of the Company's
preference shares, and this performance measure shows average net cash of £45m (2016: first half average net borrowings of
£68m; full-year average net borrowings of £46m).
Using a statutory measure (inclusive of non-recourse elements and the liability component of the Company's preference
shares) gives average net debt of £196m (2016: first half average net borrowings of £336m; full-year average net borrowings
of £230m).
h) Directors' valuation of the Investments portfolio
The Group uses a different methodology to assess the value of its Investments portfolio. As described in the Directors'
valuation section, the Directors' valuation has been undertaken using forecast cash flows for each project based on
progress to date and market expectations of future performance. These cash flows have been discounted using different
discount rates depending on project risk and maturity, reflecting secondary market transaction experience. As such, the
Board believes that this measure better reflects the potential returns to the Group from this portfolio.
The Directors have valued the Investments portfolio at £1.2bn at the half-year (2016: first half £1.2bn); full-year
£1.2bn). The Directors' valuation will differ from the statutory carrying value of these investments, which are accounted
for using the relevant standards in accordance with IFRS rather than a discounted cash flow approach.
i) Constant exchange rates (CER)
The Group operates across a variety of geographic locations and in its statutory results, the results of its overseas
entities are translated into the Group's presentational currency at average rates of exchange for the period. The Group's
key exchange rates applied in deriving its statutory results are shown in Note 2.
To measure changes in the Group's performance compared with the previous period without the effects of foreign currency
fluctuations, the Group provides growth rates on a CER basis. These measures remove the effects of currency movements by
retranslating the prior period's figures at the current period's exchange rates, using average rates for revenue and
closing rates for order book. A comparison of the Group's statutory growth rate to the CER growth rate is provided in the
table below:
2017 statutory growth compared to performance growth
Construction Services
Continuing operations UK US Gammon Total Support Services Infrastructure Investments Total
Revenue (£m)
2017 first half statutory 980 1,924 - 2,904 504 136 3,544
2016 first half statutory+ 1,080 1,578 - 2,658 535 130 3,323
Statutory growth (%) (9)% 22% - 9% (6)% 5% 7%
2017 first half performance^ 975 1,952 481 3,408 519 264 4,191
2016 first half performance retranslated^ 991 1,818 461 3,270 548 315 4,133
Performance CER growth (%) (2)% 7% 4% 4% (5)% (16)% 1%
Order book (£bn)
2017 first-half 2.2 4.7 1.2 8.1 3.3 - 11.4
2016 year+ 2.3 5.5 1.5 9.3 3.1 - 12.4
Growth (%) (4)% (15)% (20)% (13)% 6% - (8)%
2017 first-half 2.2 4.7 1.2 8.1 3.3 - 11.4
2016 year retranslated 2.3 5.2 1.5 9.0 3.1 - 12.1
CER growth (%) (4)% (10)% (18)% (10)% 6% - (6)%
^ Performance revenue is underlying revenue from continuing operations including share of joint ventures and associates as
set out in section (e).
+ Re-presented to classify the Group's 49% interests in Dutco Balfour Beatty LLC and BK Gulf LLC as discontinued
operations.
INDEPENDENT REVIEW REPORT TO BALFOUR BEATTY PLC
Conclusion
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report
for the six months ended 30 June 2017 which comprises the Condensed Group Income Statement, the Condensed Group Statement
of Comprehensive Income, the Condensed Group Statement of Changes in Equity, the Condensed Group Balance Sheet, the
Condensed Group Statement of Cash Flows and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial
statements in the half-yearly financial report for the six months ended 30 June 2017 is not prepared, in all material
respects, in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and the Disclosure Guidance and
Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for
use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible
for financial and accounting matters, and applying analytical and other review procedures. We read the other information
contained in the half-yearly financial report and consider whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK)
and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 1.1, the annual financial statements of the group are prepared in accordance with International
Financial Reporting Standards as adopted by the EU. The directors are responsible for preparing the condensed set of
financial statements included in the half-yearly financial report in accordance with IAS 34 as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the
half-yearly financial report based on our review.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting
the requirements of the DTR of the UK FCA. Our review has been undertaken so that we might state to the company those
matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the
conclusions we have reached.
Stephen Wardell
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square,
London E14 5GL
15 August 2017
Condensed Group Income Statement
For the half-year ended 30 June 2017
2017 first half unaudited 2016 first half unaudited2 2016 year audited2
Notes Underlyingitems1£m Non-underlying items (Note 7)£m Total£m Underlyingitems1£m Non-underlying items (Note 7)£m Total£m Underlying items1£m Non-underlyingitems(Note 7)£m Total £m
Continuing operations
Revenue including share of joint ventures and associates 4,191 10 4,201 3,883 93 3,976 8,215 153 8,368
Share of revenue of joint ventures and associates 4.1 (655) (2) (657) (649) (4) (653) (1,433) (12) (1,445)
Group revenue 3,536 8 3,544 3,234 89 3,323 6,782 141 6,923
Cost of sales (3,368) (8) (3,376) (3,139) (86) (3,225) (6,503) (136) (6,639)
Gross profit 168 - 168 95 3 98 279 5 284
Gain on disposals of interests in investments - - - 52 - 52 65 - 65
Amortisation of acquired intangible assets - (5) (5) - (4) (4) - (9) (9)
Other net operating expenses (159) (5) (164) (162) (27) (189) (332) (49) (381)
Group operating profit/(loss) 9 (10) (1) (15) (28) (43) 12 (53) (41)
Share of results of joint ventures and associates 4.1 30 - 30 26 - 26 57 1 58
Profit/(loss) from operations 39 (10) 29 11 (28) (17) 69 (52) 17
Investment income 5 20 - 20 40 - 40 75 - 75
Finance costs 6 (37) - (37) (38) - (38) (82) - (82)
Profit/(loss) before taxation 22 (10) 12 13 (28) (15) 62 (52) 10
Taxation 8 - 2 2 7 1 8 (12) 4 (8)
Profit/(loss) for the period from continuing
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AnnouncementREG - Balfour Beatty PLC - Transaction in Own Shares
AnnouncementREG - Balfour Beatty PLC - Transaction in Own Shares
AnnouncementREG - Balfour Beatty PLC - Transaction in Own Shares
Announcement