Margins at UK construction business now above 3%, new chief executive Philip Hoare says in his first set of results

Revenue and profit at Balfour Beatty jumped last year as the firm said its order book hit a record £23bn.

Presenting his first set of results after taking over from Leo Quinn last September, new chief executive Philip Hoare said UK turnover rose 3% to £3.1bn and operating profit jumped 36% to £110m helped by a boom in energy work such as power transmission schemes.

The firm’s UK construction business, which carries out work in the defence, energy and transport sectors, saw margins hit 3.5% which Balfour said was a year ahead of schedule.

philip hoare

Philip Hoare took over as chief executive last September

Hoare said the creation of the National Infrastructure and Service Transformation Authority (NISTA), which was set up last year to help oversee the government’s 10 year infrastructure strategy, would help the UK meet its targets.

He and other bosses at Tier One contractors met NISTA last week and Hoare added: “The UK government is committed to private finance to help with delivery and creating NISTA is a very welcome move to help with that strategy.”

Ahead of a report into the HS2 project, widely expected to be critical when it is delivered by transport secretary Heidi Alexander in the coming weeks, Hoare said the scheme was a “fantastic piece of engineering that had created thousands of jobs”.

He added: “We should talk up the value that infrastructure and construction has on this country.”

Balfour Beatty is working on several parts of the project including the Old Oak Common station in west London where the line is currently due to start and finish.

Tunnelling is making its way to its original start and finish point at Euston in central London and Hoare said the firm “in principle” would be interested in station work at the site.

He said the impact of the conflict in the Middle East had been minimal so far. “We don’t have a footprint there. There could be inflationary pressures but we’re largely insulated from that because the risk is borne by customers.”

Balfour Beatty’s biggest market is the US where revenue rose by 25% to £4.5bn but profit fell 38% to £25m after delays and cost overruns on a highways job in Texas which it said it was pursuing recoveries on.

The firm also announced it was returning £200m to shareholders this year taking the amount it has handed back to investors in the past five years to £1.2bn.

Overall group revenue was up 8% to £10.7bn with pre-tax profit up 51% to £323m. Net cash at the year-end was £1.45bn, up from £943m last time.

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