Balfour Beatty is on course to beat expectations after selling off more of its infrastructure investment stakes in December, the engineering firm said today.
The engineering firm expects to net about £65m in profit from the disposals over the full year, which come under its Build to Last transformation programme that will also see it sell a chunk of its Edinburgh University student housing scheme for £24m.
Meanwhile group revenue is expected to narrowly beat 2017’s, with its order book up £600m to £12bn.
Second half sales are set to match its first half, when sales ticked down eight per cent to £3.8bn but pre-tax profits jumped up to £56m from £50m in 2017.
Shares ticked up by almost four per cent on the news.
“Balfour Beatty is selectively winning work in all its chosen markets, both on the right terms and at appropriate margins, which reflect the bidding discipline and risk management introduced under Build to Last,” the company said.
In construction, the firm is set to meet industry standard margins of two to three per cent despite industry headwinds since the collapse of Carillion in January.
Kier Group was forced to launch an emergency rights issue to shareholders to raise cash as traders increased their short positions against the outsourcing giant earlier this month.
Meanwhile Interserve shares plunged to a 30-year low last month while the construction and services firm is now coming up with a rescue plan with shareholders.
But Balfour’s programme of asset disposals and its divisions remaining on track, means it is set to enjoy a better year than some rivals.
Leo Quinn, Balfour Beatty group chief executive, said: “The actions we have taken since the start of 2015 have created a strong foundation for the future. We have consistently invested in our capabilities, systems and leadership while de-risking the business, strengthening the balance sheet and selectively building the order book.
“Going forward, we aim to drive market leading performance by using the disciplines we have instilled to translate Balfour Beatty's expert capabilities into long term profitable growth.”