Balfour Beatty disappoints with 2012 results

published 7 March 2013

Balfour Beatty, the FTSE 250 international infrastructure group, disappointed with its 2012 results on Thursday, posting a 70 per cent decline in reported pre-tax profit from continuing operations.

The figure dropped from £246m to £75m year-on-year, while basic earnings per share (EPS) from continuing operations fell 76% from 26.7p to 6.5p.

On an underlying basis (including joint ventures and associates), pre-tax profit fell 7.0% to £310m, while EPS dropped 1.0% from 35.5p to 35p.

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Revenue for the period declined 1.0% from £11,035m to £10,896m year-on-year.

A good performance was seen in the Professional Services and Infrastructure Investments divisions, which partly offset the margin pressure in Construction Services and the first-half cost increases in Support Services.

Chief Executive Ian Tyler said: "We have delivered a set of results for the full year that demonstrated resilience in underlying earnings and a stable order book in the face of continuing challenging conditions in the construction markets in the UK and US. We have also made good progress in the implementation of measures designed to increase organisational efficiency and are on track to realise the anticipated benefits.

"Furthermore, our growth strategy of focusing on key market sectors and geographies is making headway, and is reflected in the continuing shift in our order book towards economic infrastructure."

Cash and equivalents at the year end fell to £532m from £580m at the same date in 2011.

The group will pay a total dividend of 14.1p for the year, compared to 13.8p the prior year.

Looking ahead, the company said: "Longer term, we remain convinced that infrastructure is a good place to be. We are focused on shifting our business from construction in our home markets to our target geographies and chosen market sectors, which have better growth dynamics and return characteristics. We are already seeing benefits from this focus which gives us confidence for the medium term."

The share price fell 4.29% to 274.70p by 10:12.