Balfour Beatty PLC (LON:BBY) is to boost the size of a planned share buyback in 2021 by £50mln to £150mln after a second-half recovery in activity led to strong cash generation.
The civil engineer and contractor said operations recovered steadily through the second half of 2020 resulting in an underlying profit of £51mln (£221mln in 2019) for the year to end-December after a first-half loss.
Statutory revenue, which excludes joint ventures and associates, was flat at £7.32bn (£7.31bn) helped by Hong Kong joint venture Gammon and higher support services revenue.
Orders at the year-end had risen to a new record of £16.4bn from £14.3bn twelve months earlier despite the continuing COVID-19 restrictions.
Balfour Beaty said it now expects profits for the ongoing businesses in construction services and support services in 2021 to be in line with 2019’s total of £172mln.
Net cash at the year-end was £527mln and the contractor said it has decided to repay all money received under the UK government’s job furlough scheme.
Balfour Beatty added it is introducing a new capital allocation framework that will see dividends equal to 40% of underlying profit after tax but more in the way of share buybacks if cash builds up.
Leo Quinn, chief executive, said: "Our leading positions in large growing infrastructure and construction markets, record year-end order book and £1.1bn Investments portfolio provide confidence in future cash generation.”
The statement added that Philip Aiken intends to stand down as chair at the next Annual General Meeting in May 2021 after six years in the role.