Balfour Beatty plc (LSE:BBY) shares rose then fell 3.7% to 334p after the company reported lower first-half profits and a decline in its order book.
While revenues rose 9% to £4.5 billion in the first six months of the year, group operating profit fell 6% to £80 million, but the infrastructure construction giant said it was on track for full-year expectations.
The order book declined from £17.7 billion to £16.4 billion as the high-interest rate environment causes "delays in some projects going to contract, largely in the US commercial office sector, as customers wait for economic stability".
Chief executive Leo Quinn said the order book is now "lower risk" and during a period of high inflation and interest rates, "underpins the financial results reported today and our expectations for the full year".
"Looking beyond 2023, we have positioned Balfour Beatty strongly with unique capabilities and a sector-leading balance sheet, to capitalise on national plans to transform critical infrastructure, particularly in the energy and transport markets."
Analyst Aarin Chiekrie at Hargreaves Lansdown called it a "robust start" to the financial year and said the order book’s still "healthy" and "gives plenty of visibility in the short to medium term".
"But it’s worth keeping in mind that even in the good times margins in the construction sector are pitifully thin. That's why it’s encouraging to see the operating profit margin begin to creep back up towards 2% over the first half. Such low margins leave little room for error, but Balfour reiterated its expectation that full-year profits are likely to land in line with 2022 levels."