Balfour Beatty plc raised its full-year profit guidance following a strong performance in the first half of the year, leading to a 9% increase in its share price to 945p. The FTSE 250 infrastructure group reported total revenues of £5.56 billion for the six months ending June 26, an 8% rise from the same period last year. The company’s US construction division returned to profitability, generating £22 million in underlying profit compared to an £11 million loss a year earlier, driven by growth in its buildings business serving data centers and commercial clients.
Financial Upgrades
The company now expects low double-digit percentage growth in profit from operations, an increase from its previous guidance of high single-digit growth. Average net cash guidance was also raised by £200 million to a range of £1.5 billion to £1.7 billion, alongside an increase in expected net finance income to between £35 million and £40 million, up from £28 million to £32 million. Group underlying profit from operations rose to £119 million, compared to £77 million a year earlier, while underlying earnings per share increased to 21.7p from 14.4p. The interim dividend was raised by 12% to 4.7p, and the company completed £102 million in share buybacks during the period.
Order Book and Market Position
Balfour Beatty’s order book stood at £22.9 billion, slightly up from £22.7 billion at the end of December and significantly higher than £19.5 billion a year ago. Chief Executive Philip Hoare highlighted that the company is well-positioned to capitalize on attractive growth markets and strong operational momentum. Analyst Adam Vettese noted that Balfour Beatty represents a “de-risked, high visibility business” that investors favor in the current market environment.
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The positive earnings outlook is likely to boost investor confidence in Balfour Beatty shares, impacting the construction and infrastructure sectors. Increased profitability and cash flow may also lead to further stock buybacks or dividend increases, enhancing shareholder returns. Watch for the company’s next earnings report, scheduled for later this year, which will provide further insights into its performance and market conditions.
Based on reporting by: standard.co.uk, proactiveinvestors.co.uk