Infrastructure group Balfour Beatty’s losses accelerated in the first half of the year, with reported pre-tax losses growing from £6m in the same period last year to £67m (release).
Group revenues fell three per cent to £4.3bn, and the group made an 8.6p loss per share, down from 11.6p earnings per share the year before.
The company said it ended the period with a "strong" balance sheet, putting losses down to the continued unwind of negative working capital in the business. It said its order book had risen seven per cent year-on-year to £13.9bn.
It added the decline in underlying profits (70 per cent to £45m) was due to a previously flagged deterioration in construction services and professional services. The latter was partially due to cancellation of natural resources projects and public sector spending cuts in Australia, which pushed profits down 38 per cent.
Chief executive Andrew McNaughton said the markets “continue to be challenging, but our actions are delivering the intended results”, and believes the company can perform in line with expectations for the full year.
In recent months, we have focused our attention on operational delivery in the UK construction business and the impact of the further worsening in the environment for our professional services business in Australia. We are pleased to report that, while it is early days, our action plans are delivering the intended results.
In the UK construction business, we have strengthened our management with the engagement of new leadership, closed some regional delivery units with weak future prospects and aligned the organisation more closely with customers.
Our response to the market deterioration in Australia was swift, and we now forecast a significant reduction in the adverse impact on profitability in the second half….
While executing our immediate priorities, we have also made progress on our strategic objectives. In our target growth markets, we are moving forward with the country model in Australia. The benefits of the model are evident in new wins in transportation and utilities. Middle East is another area where we have had great success, establishing Parsons Brinckerhoff firmly as a top professional services player. Our Investments division has expanded further in the period into new markets such as student accommodation and renewable energy.
The company kept its interim dividend unchanged at 5.6p.