Balfour Beatty gives upbeat trading update(2)

UK infrastructure developer Balfour Beatty says it is performing well, despite difficult market conditions.

In an interim management statement to the London Stock Exchange yesterday, Balfour chairman Steve Marshall said that for the period January 1 to May 13 this year trading has been in line with the company’s expectations, with the quality of the firm’s order book, strong acquisitions and tight cost control the key drivers of performance.

The company has so far this year reached financial close on two PPP schemes, the £170 million Fife General Hospital scheme earlier this month, and a £200 million Southwark schools project in London, which was announced yesterday.

Going forward, it said it hopes to reach financial close on at least three of the four PPP schemes on which it is preferred bidder in the first half the year. Balfour Beatty is, along with Skanska, part of the Connect Plus consortium, the preferred bidder for the UK’s £5.5 billion M25 widening scheme.

Balfour’s construction business exceeded the previous year’s performance, buoyed in the US by the $40 million acquisition of construction firm RT Dooley in February.

From a financial perspective, Balfour Beatty held average net cash of £200m for the first four months of the year.

Marshall concluded that the company’s order book was likely to be in line with the £12.8 billion reported at the end of last year, adding that owing to its strong market position the firm is likely to make progress for the full year.

Balfour Beatty’s share price closed yesterday at £3.49 on the back of the announcement, up 3.6 percent.