Balfour Beatty on track thanks to government contracts with £150m share buyback programme set for completion this year
- Balfour said trading had been in line with expectations since the start of 2022
- Group said its average monthly closing net cash balance increased to £800m
Balfour Beatty’s trading levels have been in line with expectations since the start of the year as the infrastructure continues to cash in on government contracts.
In a trading update, the firm revealed that monthly closing net cash balance increased to around £800million in the first four months of this year, up from around £671million in 2021.
In the first four months of 2022, the company spent £19million repurchasing shares and expects to complete the £150million buyback programme before the end of the year.
On track: Balfour Beatty has confirmed its trading levels have been in line with expectations since the start of the year
On completion of this year’s share buyback, and some expected normalisation of working capital, the average monthly net cash for the full year is expected to be slightly lower than the first four months, the group added.
Its order book currently stands at around £15.6billion, down from £16.1billion at the end of last year.
The group’s top brass remain upbeat about its chances of delivering profit growth in 2022.
Its UK Construction arm remains on track to deliver industry standard margins of between 2 to 3 per cent for 2022.
Balfour Beatty added: ‘In Support Services the power, road and rail maintenance businesses continue to perform well and in line with the margin target of 6-8 per cent, albeit on a slightly lower revenue base following the strategic withdrawal from the gas and water sector.’
Leo Quinn, the group’s chief executive, said: ‘We remain confident that the Group is well positioned for 2022 and beyond.
‘Our business portfolio has been transformed to focus on the growing infrastructure markets of the UK, US, and Hong Kong – each underpinned by strong government investment programmes.
‘The strength of our balance sheet and the higher quality of our order book will enable us to maximise these opportunities for profitable growth while remaining resilient to the current macro-economic challenges.’
Balfour Beatty shares have fallen today and were down 1.74 per cent or 4.20p to 236.80p in late morning trading. The group’s share price has fallen over 20 per cent in the past year.
Last month, Quinn claimed the UK could be on track for a decade of UK ‘infrastructure growth’ as the construction sector gears up for a potential future boom due to the billions in investment set aside for the industry by Boris Johnson’s Government.