Contractor Balfour Beatty plc (LON:BBY has reported a return to annual profit in 2016 and said its transformation was "well underway".
The FTSE 250-listed group posted an underlying pretax profit of £60mln for the full-year to December 31, against a loss of £123mln a year earlier, as underlying revenues rose to £8.53bn, up from £8.235bn in 2015.
The firm, which is involved in the Crossrail project, pointed out that its UK construction division returned to profitability in the second half benefitting from the diminishing impact of loss-making historic contracts.
It also saw its order book from continuing operations increase by 15% at constant exchange rates to £12.7bn thanks to its Construction Services division, in which the order book rose to £9.60bn from £7.90bn.
Looking ahead, Balfour Beatty said it expects each of its Construction Services and Support Serviced divisions to continue their “positive trajectory”, and pointed to the positive trading environment in both the UK and US, its core markets.
Transformation underway ...
Leo Quinn, the group chief executive, said: "The transformation of Balfour Beatty is well underway. We have returned the Group to profit and significantly exceeded our Build to Last Phase One targets.”
He added: "Having simplified the Group, we are focused on our core markets in the UK and US, where governments are committed to large scale expenditure on infrastructure
"All this positions us for future profitable growth. During the next two-year phase of Build to Last, we expect to achieve industry-standard margins and over the medium term, industry-leading performance."
The group scrapped its dividend in 2015 as part of restructuring efforts, but reinstated payouts for 2016, recommending a final dividend of 1.80p, taking its total dividend to 2.70p per share.
In a note to clients, analysts at Liberum Capital noted that the 2016 results were “bang in-line”.
They said: “We leave our core EBIT unchanged, but reduce 2017 EPS by 23% as disposal gains fall from £50m to £25m making the LTIP harder.”
The analysts added, however, Balfour’s recovery is “still on track” and repeated a ‘buy’ rating and 335p price target on the stock.
The shares were 0.8%, or 2.2p lower in early trading at 281.7p.
-- Adds broker comment, share price --