Shares in construction giant Balfour Beatty have surged 11.8 per cent this morning after its results showed pre-tax profit grew by 26 per cent in the first half of 2019 compared to a year earlier.
The UK-based company chalked up the strong results to its “Build to Last” programme which vies for lower-risk contracts amid a tough environment for the British contracting sector.
Pre-tax profit at the firm grew to £63m in the first half of 2019 from £50m in the same period a year earlier.
Its revenue rose to £3.88bn in the first half from £3.84bn the previous year.
Balfour Beatty’s operating cash flows rose to £94m compared to £44m a year earlier.
Despite the profit increase the company’s basic earnings per share fell to 6.7p in the first half from 10.1p in the first half of 2018.
Balfour’s dividend per share rose to 2.1p in the first half, however, from 1.6p in the same period a year previously.
Why it’s interesting
Balfour Beatty’s results paint a picture of a firm defying trends in the British construction contracting space, which have seen Carillion collapse and Interserve teeter on the edge.
The firm highlighted that its overseas businesses and investments, which make up over 50 per cent of its portfolio, help spread its risk.
Balfour upgraded its annual cash forecast to between £280m and £300m. It said the move to proceed with the controversial HS2 rail project and Heathrow airport expansion would benefit the company.
What Balfour Beatty said
Chief executive Leo Quinn said: “This is another strong set of results – increasing profits backed by a strong cash performance, plus carefully managed growth in our order book.”
“Today, the group’s geographic and operational diversity underpins our risk management, with over 50 per cent of our business and investments portfolio assets outside the UK.”
“Combined with the strength of our balance sheet and cash flows, this positions Balfour Beatty to create and return future value to shareholders.”
(Image credit: Getty)