Balfour Beatty lifted by acquisition

CONSTRUCTION group Balfour Beatty said half-year pre-tax profit rose by 32 per cent on the acquisition of a US company last year and a strong performance in Britain and Asia.

First-half pretax profit rose to 141 million pounds, compared to £107m last year, boosted by earnings at project management business Parsons Brinckerhoff.

"Our strategy has been to build Balfour as a global infrastructure business ... the results now reflect the acquisition of Parsons Brinckerhoff ... it's performed extremely well in the first half," chief executive Ian Tyler said.

Balfour also said it had closed a £230m street lighting contract for Coventry and signed a £460m contract for the second phase of satellite building for Heathrow Airport's terminal two.

Cuts in British public spending – which represents 20 per cent of Balfour sales – have raised concerns that the construction sector is likely to suffer a losses in earnings in the coming year.

“Whilst there are challenges in some markets, overall we still would see in 2010 to 2011 areas where the business will grow,” Tyler said.

The firm said its order book stood at £14.6m at June 2010, up from £14.1bn at the end of last year.

Tyler said the company was very much focussed on its global growth and future acquisitions in any one of its four core divisions were always a possibility.

Last month the coalition government said it would slash the Building Schools for the Future (BSF) programme, a multi-billion pound scheme to rebuild schools across Britain.

Balfour, which won contracts with five local authorities and is preferred bidder with three others, has said that the cuts would not impact its order book or outlook as it represents only two per cent of its business.

Tyler said that a substantial amount of contracts were funded by industry, rather than the government, another fact which he said meant Balfour