Balfour Beatty lifted by contract wins
Engineering group Balfour Beatty today said it had won more than £360m (€518.6m) of new deals as it posted annual results at the top end of expectations.
London-based Balfour said it had secured contracts in the road, rail and housing sectors as it reported a 15% rise in pre-tax profits before goodwill and one-off items to £150m (€216m), against analysts’ forecasts of around £148.5m (€213.9m).
The group said the new work involved widening the M1 from Junction 6A to Junction 10 for the Highways Agency, upgrading social housing in Newcastle and extending the railway network in Sweden.
Its order book rose by 17% to £6.8bn (€9.8bn) during 2004 as it won a number of substantial contracts and preferred bidder positions in the UK, including several major new Public-Private Partnership schools schemes and big acute healthcare projects.
It said its construction, building management and services division improved operating profits from continuing businesses by 14% to £32m (€46m) as its Mansell unit, which it bought in 2003, performed ahead of expectations.
In civil and specialist engineering and services, operating profits lifted by 10% to £23m (€33m) on the back of a good performance in the UK, particularly in utilities contracting.
Balfour said it was overcoming problems that had caused substantial losses in its operations in 2004 in the United States, where it has regional civil engineering businesses, a rail transit and services operation and an architecture, engineering and programme management unit.
It has reorganised and downsized its loss-making rail division in the United States and is closing its heavy marine engineering business there.
Balfour said it had made good progress with the shake-up and now had a “sound organisational structure” in each of its US markets.
It added that operating profits in its UK rail engineering and services operation lifted by 5% to £43m (€61.9m) as it settled maintenance contracts taken in-house by Network Rail on satisfactory terms.
The group said its leading positions in a number of long-term growth markets were encouraging and offered opportunities for further growth.
Chief executive Ian Tyler said: “We expect to make further progress in 2005 and to maintain our momentum thereafter.”
