Better than expected results helped by Parsons Brinkerhoff acquisition
Balfour Beatty’s half-year pre-tax profit has risen 32% to £141m thanks to, in part, its acquisition of US project management firm Parsons Brinkerhoff last year.
The firm added that apart from the first full contribution from the US-based consultancy arm, the rest of the group had also performed well with underlying group profits up 3%.
Chief executive Ian Tyler added that, despite the results, which are way ahead of City expectations, the firm would still be focused on cost savings. He said Balfour Beatty expects to make savings of over £30m a year, a third of which will come from improved competitiveness at project level, and the rest from changes to group back office support.
The UK’s biggest contractor by both profit and turnover, Balfour also reported that it closed a £230m street lighting contract for Coventry and signed a £460m contract for the second phase of satellite building for Heathrow Airport’s terminal 2.
The firm’s order book stood at £14.6bn at June 2010, up from £14.1bn at the end of last year.
The cancellation of the Building Schools for the Future (BSF) programme has hardly affected the firm – despite having numerous contracts and being preferred bidder on three other schemes as part of the programme. Tyler pointed out that with a turnover of over £10bn, the BSF work represents only 2% of the business.
He said: “While the timing of short-term movements in individual markets is difficult to predict, we now have significant capabilities across the infrastructure lifecycle and operate in diverse markets and geographies, which gives us strength and resilience.
“We have a high-quality order book of £14.6bn at June and a number of opportunities in the second half of the year.
“This, along with the actions taken and proposed to drive efficiency, means we are well positioned to manage any challenges in individual markets.”