US buy boosts Balfour orders

 
City A.M. Reporter
BALFOUR Beatty, Britain’s largest infrastructure contractor, said it will make further selective acquisitions after recently snapping up a US peer, a move that it said will lift its order book.

Balfour, which operates in 80 countries and offers a range of infrastructure services, said in a short trading statement yesterday that the outlook for infrastructure markets remains positive in the medium to long-term.

However the short-term outlook for construction is less bright, particularly in Balfour’s domestic market.

The UK construction market is facing challenging times ahead as the government reins in spending on public buildings, schools, hospitals and infrastructure, against the wider backdrop of a weak economy dragging on commercial construction activity.

Balfour -- led by Ian Tyler (pictured) -- is taking advantage of its strong balance sheet and global presence to offset gloom at home. It said that its net cash position will be reduced as a result of investment in the business, including acquisitions, and fluctuations in working capital.

Balfour announced last week the acquisition of US firm Howard S Wright for $93m (£58.1m), with the contractor primarily operating within the western United States. This follows on from its larger acquisition in the US in 2009, when it bolstered its professional services capacity in buying Parsons Brinckerhoff.

Shares in Balfour closed flat at 316.2p, having shed 13 per cent since March when shares hit a near three-year high, and valuing the group at £2.16bn.