Construction still a drag for Balfour Beatty

Balfour Beatty, the FTSE 250 infrastructure group which shocked the market with a profit warning last month, said that its performance has not changed since the last update.

Balfour Beatty, the FTSE 250 infrastructure group which shocked the market with a profit warning last month, said that its performance has not changed since the last update.

The company said in April that full-year profits in the UK construction division would be reduced by £50m due to a poor performance amid "difficult market conditions".

Meanwhile, while its other business remain in line with expectations, the German rail unit is facing a £10m profit shortfall.

The stock had dropped to a 52-week low of 206.7p since the trading update on April 29th, and stood nearly 14% lower over the past month and 21% down since the start of 2013 (by Monday's close).

Balfour confirmed on Tuesday that revenues in Construction Services had fallen by 11% in the first three months of the year mainly driven by a 23% drop in the UK. Elsewhere in the Professional Services and Support Services divisions, activity has remained in line with expectations.

Nevertheless, the company's total order book had increased by 5.0% by the end of the first quarter (March 31st) to £16bn and "continues to give us good visibility".

Balfour said: "As we progress through the year, our business is expected to benefit from the cost efficiency programmes we have in place, a recovery in operational performance in UK construction and the ongoing implementation of strategic initiatives.

"Based on these dynamics and the first half weighting of the profit shortfall in UK construction, we expect our profits to be more heavily skewed to the second half than in previous years."

Recommended

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework
Investment strategy

The MoneyWeek Podcast: picking stocks is fun, but you need to do your homework

John Stepek talks to Steve Clapham, investor, analyst and author of The Smart Money Method, about the dangers in picking individual stocks and why you…
8 Apr 2021
BP looks set to return more money to shareholders as it beats expectations
Energy stocks

BP looks set to return more money to shareholders as it beats expectations

Oil major BP is to embark on a share buyback programme after significantly reducing its debts. Saloni Sardana looks at what it means for your portfoli…
6 Apr 2021
Deliveroo has hit the market – but it’s not getting the warmest welcome
UK stockmarkets

Deliveroo has hit the market – but it’s not getting the warmest welcome

Food delivery company Deliveroo made its debut on the stockmarket this morning. But with the share price sliding by 30% straight away, it’s not made t…
31 Mar 2021
Three stocks to buy now that will come back stronger after Covid-19
Share tips

Three stocks to buy now that will come back stronger after Covid-19

Professional investor Ed Wielechowski of Odyssean Capital, chooses three compelling stocks that should thrive in a post-pandemic world.
29 Mar 2021

Most Popular

“Joke” cryptocurrency dogecoin goes to the moon. What’s going on?
Bitcoin

“Joke” cryptocurrency dogecoin goes to the moon. What’s going on?

Dogecoin – a cryptocurrency created as a joke – has risen by more than 9,000% this year alone. Saloni Sardana looks at how something that began as an …
19 Apr 2021
The FTSE 100 has clawed back above 7,000 – how much higher can it go?
UK stockmarkets

The FTSE 100 has clawed back above 7,000 – how much higher can it go?

The FTSE 100 index has risen to over 7,000 for the first time in over a year – it now sits just above where it was in 1999. But its era of neglect cou…
19 Apr 2021
The bitcoin bubble will burst: here’s how to play it
Bitcoin

The bitcoin bubble will burst: here’s how to play it

The cryptocurrency’s price has soared far beyond its fundamentals, says Matthew Partridge. Here, he looks at how to short bitcoin.
12 Apr 2021