Bumper order book puts Balfour Beatty profits ahead of forecasts

Construction giant Balfour Beatty said profits are ahead of expectations as it reported a bumper order book for the end of 2019.

The London-headquartered firm said it expects its order book to be more than £14 billion by the end of the year, up from £12.6 billion, in a bullish trading update.

The company said it expects to report 2019 revenues at 5% higher than the £7.8 billion figure it posted last year.

Meanwhile, group profits for the year are “slightly ahead” of board expectations after infrastructure disposals in the second half of the year.

Balfour Beatty said UK construction has continued to make “good progress” over the year and is expected to be in line with industry targets of between 2% and 3% for the year.

It also said US construction profits are expected to increase after some recent improvement.

Gammon, the group’s joint venture in Hong Kong, is expected to deliver a “strong performance with increased profit”, as the firm stressed operations were not affected by political unrest in the region.

Leo Quinn, chief executive of the group, said: “We expect to deliver another year of profitable, managed growth in 2019.

“The growing order book and strong balance sheet demonstrate our progress in positioning the group well to deliver increased value to shareholders.”

Michael Hewson, chief market analyst at CMC Markets UK, said: “Balfour Beatty has continued to go from strength to strength under the guidance of Leo Quinn.

“Since he took over in 2015, the focus on higher margin business has paid dividends and despite taking a hit from the Carillion fallout, the business has continued to look solid, though like the rest of the construction sector its share price has suffered as a result of the ongoing uncertainty around the UK economy and the Brexit deadlock.”

Shares in the company increased 4.2% to 240.2p on Thursday morning.

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