| CATEGORY: OTHER MARKET NEWS SECTOR: CONSTRUCTION & MATERIALS |
Balfour Beatty beats forecasts |
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By By Damian May
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Wed 14 Aug 2002
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LONDON (SHARECAST) - Construction and support services group Balfour Beatty deserves a slap on the back this morning after turning a record order book at the beginning of the year into forecast-beating interim profits. The company is confident of further progress and its order book is still growing.
Balfour Beatty posted a pre-tax, pre-exceptional profit of £48m for the six months to the end of June against analyst expectations of £45m and £41m a year ago. The profits came on the back of turnover which increased to £1.68bn from £1.44bn last year. But net profits after exceptionals were flat at £25m.
The company kicked off its current year with a record order book of £4.3bn and was bullish about its prospects over the medium term. It won a variety of contracts during the first half and its order book now stands at £4.8bn.
Balfour Beatty said: "We are confident in delivering further progress in 2002 and retaining our forward momentum thereafter." The group added it was happy with organic growth and, where appropriate, from acquisitions which complement its existing businesses.
Chairman Viscount Weir said the group had won a number of contracts in the first half including long-term deals for road maintenance and gas and water utilities in the UK and rail and large-scale infrastructure work in the USA, including a £1.4bn toll road in Texas.
The group is part of a consortium that has won the public-private partnership contract to rebuild the Bakerloo, Central and Victoria Tube lines, which is expected to generate £1.5bn of revenue over five years.
Balfour said that final contracts were close to being signed which will bring the group a 49% share of a £1.3bn, seven-year project to manage and maintain Consignia's entire estate of some 3,000 buildings.
The company added that while the UK market for building construction remained generally flat, the group's building and building services businesses performed well and the trend to increased building management outsourcing continued.
The company was less pleased with the US where markets were not as strong as the same period a year ago, however, they remained.
Balfour also noted that results were still being affected by cost recognition on projects being undertaken by Balfour Beatty Construction Inc in the US, which, in line with the group's normal accounting approach, have been subject to further write downs. The group pointed out that no account has been taken of any potential future settlements.
In building and in engineering, it anticipates continued progress with the usual bias in profit recognition toward the second half of the year, particularly in the latter.
In rail, it anticipates a continuation of the good results achieved in the first half of the year, particularly from the international businesses.
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