Balfour Beatty says transformation plan is on track for year end

 
Caitlin Morrison
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One of Balfour Beatty's projects is Crossrail

Balfour Beatty said this morning it's on track with turnaround plans and hopes to reach a positive net cash balance by the end of this year.

Shares in the firm were up 3.5 per cent by mid-morning.

The infrastructure group is in the midst of a transformation programme, dubbed Build to Last, after its annus horribilis in 2014, when it issued five profit warnings in one year.

The company said the first phase of the transformation plan is now nearing completion and "has delivered fundamental change" to the group – the business has been simplified and the leadership team strengthened, with "governance and processes put in place to drive greater transparency and control".

By year end, Balfour Beatty said it expects to deliver its phase one self-help targets of £200m cash in, £100m cost out and also to have a positive net cash balance.

The firm said it continues to win landmark contracts across its chosen markets on terms which "reflect the group's improved governance and controls" and added that its order book has remained stable during the second half of 2016.

In August, the company reinstated its dividend after cutting losses by 86 per cent.

Chief executive Leo Quinn said: "The actions that we have taken during the first two years of Build to Last have been necessary to lay a solid foundation for long term profitable growth. Our people have responded to this challenge with passion and commitment. I am confident that the next 24 months of Build to Last will see the group achieving industry-standard margins."

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