Infrastructure giant’s UK order book suffers as underlying profit globally rises 4%
Balfour Beatty has reported mixed half-year results as its UK order book began to feel the affects of the downturn.
The infrastructure giant said orders in the UK had been hit by the Comprehensive Spending Review, but that orders and underlying profit across the group as a whole had edged upwards.
Underlying profit across the group rose 4% as its order book increased from £14.6bn to £15.5bn. Global turnover remained flat at £5.2bn for the six month period to June 2011.
Solid figures globally reflected strong performance in its US construction business, the firm said.
But the contractor reported margins dropped in its construction, professional and support services businesses.
Margins in its construction services business dropped from 2.4% to 2%, as profit dropped 15% to £67m.
At its professional services division margins fell from 5.9% to 4.5% and profit dropped 22% to £38m.
Profit held up in its support services business at £25m but margins also fell marginally here to 3.3% from 3.45%.
Ian Tyler, chief executive, said: “Looking ahead, we will continue to manage the business on the basis that market conditions will remain tough.
“The clear strategy we have put in place, the scale and capabilities we have built over the last several years, the actions we have taken in individual markets and the cost measures we started implementing in 2010 will stand us in good stead.
“We expect recovery in our markets in the medium term, and we have positioned ourselves to take advantage of the growing demand longer-term for infrastructure across the globe.”
Balfour said its diversity in the UK had helped it to weather the “current economic turmoil”, supported by cost reduction initiatives as well as good operational performance.
The contractor said it had £292m in the bank and was also on target to make £30m from procurement and back office efficiency savings.