Share placement will raise cash as contractor says 2008 results will be at top end of expectations
Balfour Beatty has said it will raise £180m through a share placement after announcing its 2008 results would be “at the top end of expectations.”
In a statement to the City this morning the £7.5bn-turnover group said the extra cash would fund its acquisition-led growth.
It said: “Balfour Beatty’s strategy is to grow both organically and by acquisition in disciplines within or adjacent to its established core skills and principal geographic markets.”
The four areas it singled out are:
- Extending UK regional coverage in building and civil engineering
- Developing a major capability in support services
- Expanding its PPP operation beyond the UK
- Establishing a “strong multidisciplinary business” in the US
Kaupthing analyst Kevin Cammack said the move was surprising given its existing cash balances but that it may pre-empt an acquisition in the near future. “I’d say there's every chance it has something in its sights - maybe overseas.”
Andy Brown at Panmure Gordon agreed, calling the placement “a bit cheeky”.
Balfour Beatty’s share price dropped 5% to 430p in early trading due to the diluting effect of placing more shares on the market.
But the City welcomed the news that 2008 trading would be at the top end of expectations. The consensus forecast is pre-tax profit of £215m on turnover £6.3bn excluding joint ventures.