Balfour Beatty plc (LSE:BBY) has reported a strong rise in annual profit, a large dividend increase and confirmed a £150mln buyback for the third consecutive year.
The FTSE 250-listed firm saw underlying operating profit for the 12 months to December 31, 2023, rose by 42% to £279mln from £197mln in 2021, underlying earnings per share improved to 47.5p from 29.7p and the total dividend was increased by 17% to 10.5p from 9p a year ago.
In the results statement, Balfour Beatty chief executive Leo Quinn said: “The diversified portfolio, both geographically in the UK, US and Hong Kong, and operationally across Construction Services, Support Services and Infrastructure Investments, plus the strength of our balance sheet and cash management, have provided the resilience for the group to deliver ahead of expectations and grow our order book through the global instability seen in 2022.”
In the company's Construction Services unit, UK Construction delivered profit within the 2-3% UK industry-standard margin target range, and US Construction and Gammon have produced strong results once again, the company said.
Support Services delivered ahead of the 6-8% margin target range set in 2021, and the Investments portfolio valuation grew by 17% as the high levels of inflation and consequent increase in rental rates in the year benefitted the valuation of most assets.
The international infrastructure group said a year-end order book of £17.4bn (2021: £16.1bn) provides clear short- and medium-term visibility while the year-end cash position improved to £804mln from £671mln in the prior year.
Balfour Beatty said the valuation of its Investments portfolio increased to £1.3bn from £1.1bn and said 2023 operating profit from earnings-based businesses is expected to be broadly in line with 2022.
A small increase in net finance income for 2023 was forecast and Balfour Beatty said average cash is expected to reduce in 2023, due to a working capital unwind forecast in the range of £75mln to £125mln for the year.