Balfour Beatty PLC (LSE:BBY) said it is on track to deliver against expectations for the full year.
Leo Quinn, Balfour Beatty's group chief executive, said the board is confident the infrastructure group will hit targets for 2023 and that the group plans to launch another share buyback in 2024.
"Balfour Beatty's solid performance has continued in the second half of the year and the board remains confident that the group will achieve our expectations for the full year,” Quinn said in a trading update today.
The company said its order book at year-end is expected to be "marginally higher" than the £16.4 billion reported at the midway point of 2023.
The group predicts that full-year sales will be 5% ahead of last year's £8.9 billion turnover, driven by higher business volumes associated with work on HS2 and airport activity in Hong Kong.
Underlying profit from operations is expected to be broadly in line with 2022, when it generated £232 million.
It made a gain on infrastructure investment disposals of £26 million, which is in line with prior guidance of £15 million to £30 million.
Average monthly net cash continues to be expected in a range of £650 million to £700 million, it said.
In the construction services segment, US Construction had a stronger order intake in the second half of the year than the first.
In the UK, HS2 works at Area North and Old Oak Common continue to progress well, Balfour Beatty said.
It said the group’s order book was unaffected by the government’s decision to cancel HS2 Phase 2, which had yet to be contracted.
In Hong Kong, operational performance at Gammon remains strong in a period of volume growth, which has been driven by an increase of work at the major airport projects.
In its Support Services segment, the group signed a six-year extension worth £330 million to the highways maintenance contract with Lincolnshire County Council.
In October, the rail business was awarded a £43 million contract to deliver essential upgrade works on the London Underground’s Piccadilly line, and in August it was selected as a preferred bidder for Scottish and Southern Electricity Network's £10 billion Transmission Accelerated Strategic Transmission Investment framework.
Balfour Beatty said it remains on track to complete £595 million of share buybacks this month, adding that it will carry out its fourth successive year of share buybacks in 2024.
"We are pleased to confirm our fourth successive year of share buybacks in 2024, as our large order book, unique capabilities and balance sheet, provide a strong platform for continuing future shareholder returns," Quinn said in the trading update.