Proactiveinvestors United Kingdom Balfour Beatty plc https://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom Balfour Beatty plc RSS feed en Sat, 25 May 2019 08:44:41 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[RNS press release - Board Committee Membership Change ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190522153111_14084003/ Wed, 22 May 2019 15:31:11 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190522153111_14084003/ <![CDATA[RNS press release - Result of Meeting ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190520100027_14080050/ Mon, 20 May 2019 10:00:27 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190520100027_14080050/ <![CDATA[RNS press release - Result of AGM ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190516163001_14077385/ Thu, 16 May 2019 16:30:01 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190516163001_14077385/ <![CDATA[RNS press release - Balfour Beatty AGM Trading Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190516070005_14075841/ Thu, 16 May 2019 07:00:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190516070005_14075841/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190418150002_14046873/ Thu, 18 Apr 2019 15:00:02 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190418150002_14046873/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190415090001_14040915/ Mon, 15 Apr 2019 09:00:01 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190415090001_14040915/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190404161552_14029683/ Thu, 04 Apr 2019 16:15:52 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190404161552_14029683/ <![CDATA[RNS press release - Annual Report 2018 and Notice of Meeting 2019 ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190404093554_14028882/ Thu, 04 Apr 2019 09:35:54 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190404093554_14028882/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190402160749_14026065/ Tue, 02 Apr 2019 16:07:49 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190402160749_14026065/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190329160454_14022053/ Fri, 29 Mar 2019 16:04:54 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190329160454_14022053/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190322091750_14012320/ Fri, 22 Mar 2019 09:17:50 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190322091750_14012320/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190321124046_14011126/ Thu, 21 Mar 2019 12:40:46 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190321124046_14011126/ <![CDATA[News - Balfour Beatty selected as preferred bidder for £1.5bn Network Rail contract ]]> https://www.proactiveinvestors.co.uk/companies/news/216453/balfour-beatty-selected-as-preferred-bidder-for-15bn-network-rail-contract-216453.html Balfour Beatty plc (LON:BBY) has been selected as the preferred bidder for a £1.5bn contract with Network Rail to upgrade tracks across London and East Midlands.

Under the so-called Central Track Alliance contract, the infrastructure group would be responsible for the development, design and delivery of track renewals and crossings across London North West, London North East and East Midland routes.  

READ: Balfour Beatty jumps as transformation plan helps lift profits in 2018

Balfour, which has an 80% stake in the 10-year alliance, would also look after the associated infrastructure works.

The company said it expects a full contract award to be confirmed in the second quarter of 2019 and works to begin later this year.

"As one of the UK's leading rail infrastructure suppliers, Balfour Beatty is proud to be part of the alliance appointed to ensure the reliability of the UK's rail network,” said chief executive Leo Quinn.  

"We believe that industry collaboration is the way to drive higher efficiency and service standards. Network Rail's new alliance model is a great step forward in rail contract procurement."

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Thu, 14 Mar 2019 08:22:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/216453/balfour-beatty-selected-as-preferred-bidder-for-15bn-network-rail-contract-216453.html
<![CDATA[RNS press release - BALFOUR BEATTY PREFERRED BIDDER ON £1.5BN CONTRACT ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190314070010_14001517/ Thu, 14 Mar 2019 07:00:10 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190314070010_14001517/ <![CDATA[News - Balfour Beatty jumps as transformation plan helps lift profits in 2018 ]]> https://www.proactiveinvestors.co.uk/companies/news/216370/balfour-beatty-jumps-as-transformation-plan-helps-lift-profits-in-2018-216370.html Balfour Beatty plc (LON:BBY) shares jumped in early trading Wednesday after full-year profits rose on the back of results from its transformation plan.

The FTSE 250 construction firm reported a rise in underlying pre-tax profit to £181mln from £165mln in the year ended 31 December 2018, although underlying revenues fell to £7.8bn from £8.2bn.

READ: Balfour Beatty raises full-year guidance as it pockets gains from disposals

Balfour’s order book meanwhile increased to £12.6bn from £11.4bn in 2017 while the final dividend was increased 33% to 3.2p per share, taking the total for the year to 4.8p from 3.6p.

The results were broadly in line with updated forecasts issued in December after Balfour pocketed gains from several disposals as part of its restructuring efforts.

The company’s chief executive, Leo Quinn, said during the second half of 2018 the company had achieved “industry standard margins” and that it would perform in line with market expectations for 2019.

Turnaround strategy

Quinn has been spearheading the turnaround strategy at Balfour, known as Build to Last, which was first launched in 2015 and included the goal of winning higher margin contracts as well as inward investment.

The firm also said it had contingency plans in place for any uncertainty arising out of Brexit, adding that it had been planning for all outcomes.

George Salmon, equity analyst at Hargreaves Lansdown, said the firm’s net cash position of £337mln at the end of the year and the “impressive” infrastructure portfolio meant the company’s balance sheet was strong and there was “plenty of infrastructure business around on both sides of the Atlantic”.

However, he added that “a pragmatic investor would demand more” from the company.

“Margins have improved to at or above industry norms, but they’re still in the low single-digit percentages and the downfall of Carillion is a constant reminder of how little room for error there is in this industry.”

In a note to clients, analysts at broker Liberum said the results had come in ahead of their expectations with the £181mln profit figure beating their forecast of £178mln.

They also maintained their ‘Buy’ rating and 350p price target on the stock and maintained forecasts of 3% sales growth in 2019.

Shares were up 0.9% at 288.5p.

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Wed, 13 Mar 2019 09:44:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/216370/balfour-beatty-jumps-as-transformation-plan-helps-lift-profits-in-2018-216370.html
<![CDATA[RNS press release - BALFOUR BEATTY PLC RESULTS FOR FULL YEAR 2018 ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190313070002_13999797/ Wed, 13 Mar 2019 07:00:02 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190313070002_13999797/ <![CDATA[RNS press release - Board Committee Membership Change ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190311155715_13997827/ Mon, 11 Mar 2019 15:57:15 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190311155715_13997827/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190219143935_13974547/ Tue, 19 Feb 2019 14:39:35 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190219143935_13974547/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190211165652_13965456/ Mon, 11 Feb 2019 16:56:52 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190211165652_13965456/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190124093520_13945473/ Thu, 24 Jan 2019 09:35:20 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190124093520_13945473/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190117150726_13938611/ Thu, 17 Jan 2019 15:07:26 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20190117150726_13938611/ <![CDATA[RNS press release - Board Committee Membership Change ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181219103954_13909613/ Wed, 19 Dec 2018 10:39:54 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181219103954_13909613/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181218161816_13908465/ Tue, 18 Dec 2018 16:18:16 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181218161816_13908465/ <![CDATA[RNS press release - Block listing Interim Review ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181218121219_13908076/ Tue, 18 Dec 2018 12:12:19 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181218121219_13908076/ <![CDATA[News - Balfour Beatty raises full year guidance as it pockets gains from disposals ]]> https://www.proactiveinvestors.co.uk/companies/news/211209/balfour-beatty-raises-full-year-guidance-as-it-pockets-gains-from-disposals-211209.html Balfour Beatty PLC (LON:BBY) raised its guidance for the year following the disposal of further assets from its infrastructure investments arm this month as part of a wider restructuring plan.

The infrastructure group said it estimates profit from disposals will amount to about £65mln so now expects its full-year performance to be ahead of its previous forecast.

Following the disposal of its interest in Fife Hospital for £43mln in September, the group expects to sell an 80% stake in the Edinburgh University student accommodation project for £24mln.

Stronger balance sheet

The company also lifted its estimates for 2018 average money net cash to £185mln from the previous £140mln to £170mln range predicted.

The group said it had strengthening its balance sheet after completing the repayment of its £252.7mln convertible bond from available cash resources, which has reduced gross debt by 45%. Net cash is expected to be broadly flat from the prior year.  

READ: Balfour Beatty aims to reassure on debt situation, says completed repayment of £252.7mln convertible bond

At year-end, the order book is forecast to be £12bn, up from £11.4bn last year.

Revenue in the second half of the year is likely to be flat compared to the first half when revenue fell to £3.8bn from £4.2bn last year.

Under its so-called “Build to Last” strategy, the firm is being selective about the contracts it takes on. Balfour Beatty said the contracts must be on the “right terms and at appropriate margins, which reflect the bidding discipline and risk management introduced under Build to Last”.

Margins across businesses to meet industry standards

Its UK construction division is estimated to deliver second-half margins of 2-3%. The Aberdeen Western Peripheral Route project the company is working on with Galliford Try is expected to be completed this year.

Following the collapse of Carillion in January, Balfour Beatty and Galliford Try became the remaining joint venture partners in the project. 

In the US construction unit, second half revenue is projected to be in line with the first half and profit from operations is forecast to show further improvement, meeting the industry standard target range of 1-2%.

Profit from operations in the support services business is expected to grow with the margin in line with the 3-5% industry standard target range. A strong performance in transportation, particularly the road maintenance unit, has been partly offset but by weakness in utilities.

READ: Balfour Beatty hikes interim dividend 33% as it sounds confident note on outlook

“We are on track to deliver our Build to Last Phase Two goal of achieving industry standard margins in all earnings based businesses in the second half of 2018,” said chief executive Leo Quinn.

"The actions we have taken since the start of 2015 have created a strong foundation for the future. “

He added: “We have consistently invested in our capabilities, systems and leadership while de-risking the business, strengthening the balance sheet and selectively building the order book.

"Going forward, we aim to drive market-leading performance by using the disciplines we have instilled to translate Balfour Beatty's expert capabilities into long-term profitable growth."  

Shares rose 3.6% to 255p in morning trading.

Balfour Beatty a 'clear buy', says Peel Hunt 

Peel Hunt said the stock is a "clear buy within an undervalued sector".

"In common with the wider sector, the shares have been under considerable pressure," it said. 

"However, it is clear that the current management team has successfully moved into the final Phase of the Build to Last programme (achieving premium industry margins and maximising portfolio value).

"We sense with the current market backdrop and momentum there could be scope for further strategic and operational outperformance."

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Fri, 14 Dec 2018 07:43:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/211209/balfour-beatty-raises-full-year-guidance-as-it-pockets-gains-from-disposals-211209.html
<![CDATA[RNS press release - BALFOUR BEATTY TRADING UPDATE ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181214070002_13903584/ Fri, 14 Dec 2018 07:00:02 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181214070002_13903584/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181204161034_13891366/ Tue, 04 Dec 2018 16:10:34 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181204161034_13891366/ <![CDATA[News - Balfour Beatty aims to reassure on debt situation, says completed repayment of £252.7mln convertible bond ]]> https://www.proactiveinvestors.co.uk/companies/news/210479/balfour-beatty-aims-to-reassure-on-debt-situation-says-completed-repayment-of-2527mln-convertible-bond-210479.html Balfour Beatty PLC (LON:BBY) revealed on Tuesday that it has completed the repayment of its £252.7mln convertible bond from available cash resources, aiming to reassure investors in the wake of fears over a debt crunch for infrastructure lenders.

Last Friday, Balfour’s FTSE 250-listed peer Kier Group PLC (LON:KIE) announced plans to raise around £264mln via a rights issue to accelerate its net debt reduction plans and strengthen its balance sheet.

READ: Kier Group shares plunge as FTSE 250-listed firm taps shareholders for around £264mln via a rights issue

Kier said it was raising the cash because it believes that the risks associated with its net debt position have recently increased, adding that the cash call will better position the group in light of tighter credit markets and more stringent tender pre-qualification requirements.

Haydn Mursell, Kier’s chief executive had commented: "There has been a recent change in sentiment from the credit markets towards the UK construction sector, with various lenders indicating that they will be reducing their exposure to the sector.

“This has led to lower confidence among other stakeholders and an increased focus on balance sheet strength. The Rights Issue is intended to address these issues, better position Kier to continue to win new business and further strengthen our market leading positions."

Balfour says 45% of net debt paid down

To help allay fears over its own position, in its brief statement on Tuesday, Balfour Beatty said that as a result of the convertible bond repayment, it has now paid down 45% of its gross debt in the last 12 months.

In a note to clients following Balfour’s statement, analysts at Liberum Capital noted that this repayment was planned and said it should generate £12mln to £13mln in annualised pre-tax savings, which are already in their estimates.

After this, the Liberum analysts added, Balfour will have around £340mln of gross debt, but they expect the firm to make no repayments in 2019, given they have only made whole payments.

However, they pointed out that in full-year 2020, it will be possible to redeem US$45mln of US loans in March and £112mln of preference shares in July, with the next maturity for US$200mln of US Loans being in 2023.

Bank credit harder over last two years

The analysts noted that Balfour believes that bank credit has become harder in the last two years, not necessarily the last two months.

However, they added, the mid-cap has observed that Network Rail requires its suppliers to pay their suppliers within 28 days, indicating that there is a clear industry trend towards faster payment of supply chains.

The Liberum analysts said they continue to believe that Balfour’s balance sheet strength - including its £1.2bn PPP (public-private partnership) portfolio - is a source of competitive advantage.

They expect Balfour’s trading statement, due on 14 December to indicate that the group is on track for industry standard margins in the second-half.

The analysts concluded that Balfour’s current year P/E (price earnings of 11.2x is attractive given the PPP portfolio and recovery potential.

Liberum reiterated a ‘buy’ rating and 350p target price on Balfour’s shares, which in late morning trading on Wednesday were 0.6% lower at 243.20p.

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Tue, 04 Dec 2018 11:50:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/210479/balfour-beatty-aims-to-reassure-on-debt-situation-says-completed-repayment-of-2527mln-convertible-bond-210479.html
<![CDATA[RNS press release - BALFOUR BEATTY COMPLETES REPAYMENT OF £253M BOND ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181204070012_13889912/ Tue, 04 Dec 2018 07:00:12 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181204070012_13889912/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181120152625_13874025/ Tue, 20 Nov 2018 15:26:25 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181120152625_13874025/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181116074558_13869783/ Fri, 16 Nov 2018 07:45:58 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181116074558_13869783/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181112135734_13863720/ Mon, 12 Nov 2018 13:57:34 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181112135734_13863720/ <![CDATA[News - Balfour Beatty wins £425mln of motorway build work ]]> https://www.proactiveinvestors.co.uk/companies/news/208706/balfour-beatty-wins-425mln-of-motorway-build-work-208706.html Balfour Beatty plc (LON:BBY) has picked up contracts worth £425ml to design and build Britain’s next generation of motorways and A roads.

The contractor has been selected for the B6 contract in the south-east, worth up to £1.1bn, and B8 in the north, worth £2bn.

READ: Balfour Beatty appointed to two new civil engineering frameworks with combined total revenue value of up to £2.1bn

Balfour Beatty’s contracts are for the initial phases of work on the six-year frameworks with future packages of work to be awarded based on performance. 

At construction peak, Balfour Beatty will employ 250 people, of which 5% will be apprenticeships.

 

 

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Wed, 07 Nov 2018 08:16:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/208706/balfour-beatty-wins-425mln-of-motorway-build-work-208706.html
<![CDATA[RNS press release - BALFOUR BEATTY SECURES £425M HIGHWAYS ENGLAND WORK ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181107070005_13857580/ Wed, 07 Nov 2018 07:00:05 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181107070005_13857580/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181106151322_13857182/ Tue, 06 Nov 2018 15:13:22 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181106151322_13857182/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181105091226_13854803/ Mon, 05 Nov 2018 09:12:26 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181105091226_13854803/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181025164606_13843052/ Thu, 25 Oct 2018 16:46:06 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181025164606_13843052/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181017182703_13833011/ Wed, 17 Oct 2018 18:27:03 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181017182703_13833011/ <![CDATA[News - Balfour Beatty appointed to two new civil engineering frameworks with combined total revenue value of up to £2.1bn ]]> https://www.proactiveinvestors.co.uk/companies/news/207268/balfour-beatty-appointed-to-two-new-civil-engineering-frameworks-with-combined-total-revenue-value-of-up-to-21bn-207268.html Balfour Beatty plc (LON:BBY) shares rose on Tuesday following news it has secured contracts with a combined total value of up to £2.1bn in revenue after being appointed as sole contractor to Scape Group's two new civil engineering frameworks.

The Scape national civil engineering framework, valued at £1.6bn, covers England, Wales and Northern Ireland, while another in Scotland is worth £500mln.

READ: Balfour Beatty bouncing back but under pressure to grow margins further

The FTSE 250-listed firm said the frameworks allow local authorities, local enterprise partnerships and other public sector bodies to commission works "through a procurement process that provides the fastest route to market and utilises early contractor engagement to deliver best value design solutions".

It pointed out that the frameworks - open to all public sector bodies in the UK - will run for four years from October 2018, with schemes due to be awarded from early 2019.

Balfour Beatty’s chief executive, Leo Quinn said: "These frameworks enable us to build on our strong partnership with Scape. Our engineering and project management expertise coupled with our detailed regional knowledge supports Scape's delivery of a wide range of rapidly mobilised infrastructure projects."

In early morning trading, Balfour Beatty shares were 2.9% higher at 262.20p.

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Wed, 17 Oct 2018 09:11:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/207268/balfour-beatty-appointed-to-two-new-civil-engineering-frameworks-with-combined-total-revenue-value-of-up-to-21bn-207268.html
<![CDATA[RNS press release - BALFOUR BEATTY APPOINTED TO £2BN SCAPE FRAMEWORKS ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181017070004_13831360/ Wed, 17 Oct 2018 07:00:04 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20181017070004_13831360/ <![CDATA[RNS press release - Appointment of Non-Executive Director ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20180921121842_13800367/ Fri, 21 Sep 2018 12:18:42 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20180921121842_13800367/ <![CDATA[RNS press release - BALFOUR BEATTY 50% INTEREST SALE IN FIFE HOSPITAL ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20180919070001_13795740/ Wed, 19 Sep 2018 07:00:01 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20180919070001_13795740/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20180918132524_13795131/ Tue, 18 Sep 2018 13:25:24 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20180918132524_13795131/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20180815183157_13757121/ Wed, 15 Aug 2018 18:31:57 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20180815183157_13757121/ <![CDATA[News - Balfour Beatty bouncing back but under pressure to grow margins further ]]> https://www.proactiveinvestors.co.uk/companies/news/202954/balfour-beatty-bouncing-back-but-under-pressure-to-grow-margins-further-202954.html Balfour Beatty PLC’s (LON:BBY) turnaround plan appears to be working but investors want to know what’s in store for the construction firm next.

The company posted a sharp rise in first-half profits as cost savings achieved under the so-called Build-to-Last transformation programme and higher margins offset a drop in revenue.

READ: Balfour Beatty hikes interim dividend 33% as it sounds confident note on outlook

Chief executive Leo Quinn said all of the businesses are now either achieving industry standard margins or are on track to do so in the second half.

The restructuring to simplify operations and improve margins began in 2015 after losses at its UK construction arm led to a series of profit warnings. As part of the turnaround plan, the company has sold off operations in Australia, the Middle East, and Indonesia to focus on core markets, including the UK, US and Ireland.

Restructuring paying off

Russ Mould, investment director at AJ Bell, said Quinn has done a good job of fixing Balfour’s balance sheet, bringing costs under control and boosting profitability.

He pointed out that Quinn has a well-earned reputation as a turnaround specialist at defence firm QinetiQ and printing outfit De La Rue.

“However, now that all of its divisions are either achieving industry-standard margins or are set to do so in the second half, attention will turn to where Quinn can take Balfour next,” Mould said.

“He may face a difficult task in an uncertain UK construction market despite a robust looking order book.”

Balfour said it expects profitable growth in 2019 and beyond, supported by tight cost control, a strong order book and a robust balance sheet.

Balfour under pressure to lift margins

But the company is under pressure to grow margins.

While margins in the US construction and support services divisions in the first half were in line with the firm’s expectations, the margin in the UK construction unit fell well below its target.

 “The Build to Last strategy, which has seen the group return from the brink, calls for above average margins beyond 2019 and at the moment many divisions are still lingering at the bottom end of their target ranges,” said  Nicholas Hyett, equity analyst at Hargreaves Lansdown.

“In an industry where pricing is notoriously competitive, convincing buyers that Balfour is worth a premium is a tough ask. At least government spending on infrastructure on both sides of the Atlantic provides a fairly benign backdrop.”

Balfour left its full year guidance unchanged as its order book grew in the first half after several wins in the US construction arm.

The outlook for the UK construction arm looks bright too as the government has a large pipeline of infrastructure projects.

Liberum thinks there should be opportunities on Heathrow’s third runway project, which is worth £14bn. “The plan was approved by MPs in June but is likely to face legal action, which could cause delays,” the analyst added.

Problem contracts 

The broker said there were still a number of problem contracts, including the Aberdeen Western Peripheral Route project for which Balfour took a £23mln write-down following the collapse of joint-venture partner Carillion in January. Balfour expects cash outflow of £135mln on the project for 2018, up from the previous guidance range of £105 -£120mln, based on completion in autumn.

“We see the risks at Aberdeen as evenly balanced; there is a risk that the contract slips from August, but there is also a possibility that accruals turn out to be too prudent,” Liberum said.

Liberum maintained a ‘buy’ rating on the stock and said it continues to expect full diluted earnings per share of 17.5p for fiscal year 2018. It raised its average net cash estimate to £145mln from £132mln.

“Leo Quinn has a good track record of driving strong cash flows and we believe Balfours can get to about £500mln spot net cash by 2020 (or around £250mln of average net cash),” Liberum said.

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Wed, 15 Aug 2018 12:03:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/202954/balfour-beatty-bouncing-back-but-under-pressure-to-grow-margins-further-202954.html
<![CDATA[News - Balfour Beatty hikes interim dividend 33% as it sounds confident note on outlook ]]> https://www.proactiveinvestors.co.uk/companies/news/202929/balfour-beatty-hikes-interim-dividend-33-as-it-sounds-confident-note-on-outlook-202929.html Balfour Beatty plc (LON:BBY) hiked its interim dividend by 33% and said it was confident of delivering “profitable growth” in 2019 as it reported a sharp rise in profits but a drop in revenues.

The construction firm posted an underlying pre-tax profit of £56mln for the first six months of the year, up from £22mln a year ago, reflecting higher margins and cost savings achieved under its so-called Build-to-Last turnaround plan. 

Revenue declines 

Underlying revenue fell to £3.8bn from £4.2bn last year due to a managed reduction in the order book in 2017.  The company said it expects second-half revenue to be in line with the first.

The construction services division saw revenue fall 13% to £2.9bn due to a decline in the US, while revenue in the support services unit grew 5% to £543mln on the back of growth in utilities and transportation businesses.

Balfour’s order book rose to £12.6bn from £11.4bn last year after a number of wins in the US construction business, including a 30% share of the US$2bn Los Angeles Airport Automated People Mover project.

Impact of Carillion collapse 

Following the collapse of Carillion in January, Balfour and Galliford Try became the remaining joint venture partners in the Aberdeen Western Peripheral Route project. Balfour, which now has a 50% interest in the contract, recognised a £23mln loss on the project in the first half.

The group now expects cash outflow of £135mln on the project for 2018, up from the previous guidance range of £105 -£120mln, based on completion in autumn.

However, Balfour was upbeat about the outlook, saying a strong order book and balance sheet gives it “confidence for profitable growth in 2019 and beyond”.

READ: Balfour Beatty trading in line with expectations as restructuring makes progress

The dividend was raised to 1.6p each from 1.2p last year as net cash rose to £366mln from £151mln.

Chief executive Leo Quinn. said all of the businesses are now either achieving industry standard margins or are on track to do so in the second half.

“The disciplines installed under Build to Last are also enabling us to increase the order book with key infrastructure projects to translate Balfour Beatty's expert capabilities into future profitable growth,” he said

"Given the strength of our balance sheet and the board's confidence that the Group's full year earnings will meet expectations, we are raising the interim dividend by 33% and plan to repay the outstanding convertible bonds this year."

Shares rose 2.6% to 298p in morning trading.

Strategy calls for above-average margins beyond 2019, says analyst

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said the real test for the company will be from 2019 onwards.

“The Build to Last strategy, which has seen the group return from the brink, calls for above average margins beyond 2019 and at the moment many divisions are still lingering at the bottom end of their target ranges. In an industry where pricing is notoriously competitive, convincing buyers that Balfour is worth a premium is a tough ask,” Hyett said.At least government spending on infrastructure on both sides of the Atlantic provides a fairly benign backdrop.”

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Wed, 15 Aug 2018 07:47:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/202929/balfour-beatty-hikes-interim-dividend-33-as-it-sounds-confident-note-on-outlook-202929.html
<![CDATA[RNS press release - Balfour Beatty PLC Half-Year 2018 Results ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20180815070002_13755630/ Wed, 15 Aug 2018 07:00:02 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20180815070002_13755630/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20180716182438_13719743/ Mon, 16 Jul 2018 18:24:38 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20180716182438_13719743/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20180711163236_13714501/ Wed, 11 Jul 2018 16:32:36 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20180711163236_13714501/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20180711163056_13714500/ Wed, 11 Jul 2018 16:30:56 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3079/LSE20180711163056_13714500/