Balfour Beatty nets mammoth profit after selling big slice of the M25 – and it could soon double its returns

 
Oliver Gill
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Balfour Beatty's interest in the M25 is held through operator Connect Plus (Source: Getty)

Construction giant Balfour Beatty today struck a £103m deal to sell a big stake in the company that operates the M25.

Dalmore Capital, which last weekend hit the headlines by leading the purchase of Anglian Water, has snapped up a 12.5 per cent stake in Connect Plus.

Balfour Beatty is net a £53m profit from the sale – a huge beat on market consensus of £16m.

The deal needs to be signed off by the Highways Agency but Balfour Beatty expects to complete it before the end of the year.

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"This transaction emphasises the ongoing attractiveness of our infrastructure assets and is in line with our declared intent to maximise value for shareholders," said Balfour Beatty chief executive Leo Quinn.

Numis analyst Howard Seymour said the sale "demonstrates further the excellent track record and group strategy for selling mature assets". Seymour said the plan to use the proceeds to pay down gross debt "provides the group with the best balance sheet in the sector".

The FTSE 250 builder is in line to double its returns after entering into an agreement to flog another 12.5 per cent slice of its interest in Britain's busiest road to funds managed by Equitix Investment Management Limited and Dalmore. The terms of the additional sale would be "at an equivalent price". Equitix and Dalmore have until 13 May 2018 to agree to the further sale.

Balfour Beatty shares rose over two per cent in trading.

Read more: Balfour Beatty turnaround continues: Shares rise after profits double

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