Strengthening US business drives up group's building sector operating profit by 39% for the half-year but rail profit down
Balfour Beatty has reported a 14% rise in pre-tax profit to £108m in the first half of 2009 compared with the same period last year.
Posting its results for the six months to 27 June, it highlighted a strong US business, which has helped drive up operating profit in the building sector of the group by 39%.
Overall, group operating profit rose 30% from £88m to £114m. In the engineering sector it increase by 5% and in investments by 86%, but profit in the rail sector decreased from £9m to £7m.
After exceptional items and amortisation, the company's operating profit stood at £87m, compared with £137m for the same period in 2008.
The group's results also reveal that Balfour Beatty WorkPlace, the firm's facilities management business, has been continuing strong organic growth in this sector over the past years. It said this was “offset by a weaker performance in our UK regional building business”.
In the US, Balfour Beatty Construction performed strongly. Major contracts have been secured in the past six months from clients including the US Army Corps of Engineers and the Parkland Health Authority. There was a four-month contribution from RT Dooley, a construction firm based in North Carolina, acquired for a net £22m in February 2009.
Balfour Beatty has predicted a strong 2009/10 as a result of a forward order book worth £12.5bn.
Chief executive Ian Tyler said: “We have made good progress in growing our business presence in the US, based on the principles which have made our UK business so successful. We have won important contracts in Asia and closed a number of UK PPP projects.
“Our strong first half performance, together with the visibility provided by our significant order book of high-quality work, underpins our confidence in the prospects of the group and we anticipate making good progress in 2009.”
Balfour Beatty also announced today its selection as an alliance partner to deliver a £590m capital programme with South West Water.
The proposed five-year capital programme starts in April 2010. Balfour Beatty's share of the scheme is likely to be in excess of £100m.
The programme will involve the delivery of South West Water's clean and waste water capital maintenance and asset replacement programme. Balfour Beatty will be required to provide infrastructure work on treatment plants and networks.