Balfour Beatty has returned to industry standard margins and built up strong cash reserves completing a three-year turnaround plan.
The firm reported underlying profit from operations last year rose 5% to £205m from revenue down by around 5% to £7.8bn.
Leo Quinn, Balfour Beatty group chief executive, said: “Since the start of Build to Last in 2015, Balfour Beatty has simplified and refocused its operations, embedded new governance, reduced operating expenses by almost 40% and invested steadily in innovation, capability and leadership.
“The businesses are back at industry standard margins, underpinned by a strong balance sheet and asset base.
“Balfour Beatty’s transformation has gone beyond resolving the legacy issues of forced growth: the Group’s strong competitive positions in large and growing infrastructure markets, and the platform provided by its scalable operating model, provide the ability to deliver profitable managed growth.”
During the year Balfour’s cash position remained strong with average net cash up to £194m from £42m previously.
The order book increased by 11% to £12.6bn while maintaining disciplined selective bidding in line with the group’s stated policy, said Quinn.
He added that the firm’s main operating businesses achieved Build to Last phase two margin targets in the second half of 2018, with UK construction hitting 2.4%, US construction reaching 1.4% and support services slightly ahead of target at 5.2%.
Quinn said Balfour Beatty now has one of the strongest balance sheets in the sector with net assets increasing from £1.06bn to £1.24bn.
Over the year the firm recognised booked an extra £29m loss on the Aberdeen Bypass project.
from Construction Enquirer http://www.constructionenquirer.com/2019/03/13/balfour-beatty-hits-2-4-construction-margin/
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