Balfour Beatty plc (LON:BBY) said it expects operating profits to return to 2019 levels in a year’s time after swinging to an interim loss for 2020.
The infrastructure group said it plans to reinstate the dividend as soon as is appropriate, adding that it is “right place right time” for the industry as governments consider the construction sector an economic growth engine.
READ: Balfour Beatty keeps operations going following government safety guidelines
In the UK, the approval of the HS2 high-speed train project provides “critical visibility and impetus”, while the US and Hong Kong are also planning more infrastructure spend, it added.
However, the three countries, which account for 75% of Balfour Beatty’s order book, have been impacted by the coronavirus (COVID-19) pandemic.
In the six months to June 26, 2020, Balfour Beatty said its revenue dipped by 6% to £4.1bn but last year’s £63mln pre-tax profit swung to a £26mln loss due to the pandemic's impact. Cash at the end of the period was £563mln.
"We continue to believe that Balfours balance sheet strength... is a source of competitive advantage," analysts at Liberum commented.
"We believe that Balfours is mislabelled as a UK Construction company, when it is more like a US Infrastructure fund."
Shares slid 4% to 252.2p on Tuesday morning.
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