Balfour Beatty plc (LON:BBY) has announced that a joint venture has won a US$1.95bln contract for the building, financing and managing of an airport transit system at Los Angeles International Airport (LAX).
The group said the contract - which was awarded to a joint venture of construction groups in which Balfour Beatty holds a 27% stake - includes the designing and building of a 2.25 mile long, above ground airport transport system to connect the LAX central terminal area to a rental car facility, six stations and a vehicle maintenance facility.
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The FTSE 250-listed infrastructure firm added that, once completed, the system will be able to operate up to nine trains simultaneously, with moving walkways to the terminals and parking garages.
Leo Quinn, Balfour Beatty's chief executive, said: "This award at LAX, one of the world's busiest airports, recognises our expertise and track record for delivering critical transportation infrastructure."
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Neil Wilson, senior market analyst at ETX Capital, said: "Despite some setbacks in the share price following the collapse of Carillion, this is yet another sign of the solid progress being made under Leo Quinn and the Build to Last strategy. It’s the first major public-private partnership contract win in the US civil infrastructure market – one that could grow significantly in the coming years, particularly if we consider the shape of proposed infrastructure plans. The hope is that Donald Trump’s infrastructure spending plan will produce more such contracts for Balfour."
"Existing heavy US exposure means it is well placed to benefit, although it remains unclear exactly what the spending plan will eventually look like. Half year results showed real promise and the December trading update continued the positive theme. Margins are improving, although there is still a fair bit of work to achieve industry standard targets in the UK. But the US business, twice the size of the UK, delivered underlying operating profit margin of 0.9%, close to the 1-2% target," he added.
Balfour's shares were up 2.4% in late afternoon trading at 279.9p.
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