Construction giant Balfour Beatty has improved its profit and cash guidance after a strong first-half performance, sending shares to a record high.
Strong first-half performance
The FTSE 250 firm, which has a market capitalisation of more than £4 billion, saw total revenues increase by 8% to £5.56 billion for the half-year to June 26, compared with a year earlier. The company said this was supported by rising demand in its US buildings and UK power transmission divisions.
The group's US construction arm also returned to profit, boosted by projects including data centres.
Guidance lifted
Balfour Beatty lifted its earnings guidance to low double-digit growth, having previously pointed towards a high single-digit rise. It also said it is on track to have average net cash of between £1.5 billion and £1.7 billion this year, up from a previous £1.3 billion to £1.5 billion range.
Shares in the group lifted higher on Wednesday morning, taking them to their highest level on record.
CEO and analyst comments
Philip Hoare, group chief executive, said: “Balfour Beatty enters the second half with real momentum. Our strong first-half performance reflects the quality of our business, the discipline of our execution and, above all, the exceptional contribution of our people in delivering for our customers. Supported by a £23 billion order book, attractive growth markets and strong operational momentum, Balfour Beatty is well positioned to deliver these programmes safely, efficiently and at scale.”
Adam Vettese, market analyst for Etoro, said: “This is exactly the kind of de-risked, high visibility business the market wants right now. With major UK energy and defence programmes still to flow into the order book, and a healthy pipeline of US work, Balfour is well placed to keep compounding. The progressive dividend and ongoing buybacks only sweeten the deal.”
