Balfour Beatty delivers 2-3% construction margin goal

Aaron Morby 9 months ago
Share

Balfour Beatty chief Leo Quinn has achieved his goal of returning the business to industry standard margins by the end of this year.

Quinn's Build to Last programme puts Balfour Beatty back on track after three years of transformation

In a trading statement this morning, he revealed construction margins had returned to 2-3% in the second half of the year, despite a competitive market backdrop.

At the support services operations profit is also expected to grow, with the margin showing further improvement within its 3-5% industry standard target range.

He also said Balfour Beatty’s performance for the year would be above previous expectations as a result of securing the partial sale of 80% of its Edinburgh University student accommodation project for £24m.

The improved performance delivers the second phase of Quinn’s Build to Last programme, which has turned around Balfour’s fortunes over three years.

Balfour Beatty has also succeeded in paying down nearly half of its gross debt in the last 12 months.

The progress in reducing debt from around £640m to nearer £350m comes amid growing concern about the tightening debt markets for contractors.

Also Balfour Beatty average monthly net cash is now forecast at £185m, ahead of the previous £140m to £170m guidance.

Quinn said: “We are on track to deliver our Build to Last Phase Two goal of achieving industry standard margins in all earnings based businesses in the second half of 2018.

“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.”

Alastair Stewart, construction analyst at Stockdale Securities, said: “This is a good performance given the debt worries affecting other companies in the sector.”

Latest news

Yorkshire Water reveals winners of £1bn civils deal

18 contractors win places on AMP7 programme: Full list
2 hours ago

Balfour Beatty starts tunnelling at Hinkley Point

Firms starts first of three underground tunnels for cooling water
11 hours ago

Kier plunges to £245m loss

Kier chief Andrew Davies says core business is in good shape as recovery plan advances
16 hours ago

Construction Manager of the Year crowned

CIOB to review awards after all 80 finalists this year were men
17 hours ago

Lovell signs deal to build 4,000 West Midlands homes

Lovell Partnerships to build homes on brown field land over next eight years
17 hours ago

Engineer killed working on Waterloo Station travelator

Fatal accident during maintenance work at underground station
1 day ago

Chain fails during crane lift on Robertson hotel site

Lifting operations suspended at site by contractor
2 days ago

Caddick lands £10.7m first phase of Cheshire business park

Developer Chancerygate awards its largest ever contract
1 day ago

HS2 presses ahead with £3.5bn phase 2a bidders day

October bidders day for design and delivery partner and seven civils packages on West Midlands to Crewe route
2 days ago

Public inquiry into hospital construction problems

Patient concerns lead to probe into two Multiplex hospital jobs
2 days ago

BAM wins £20m Leeds business school block

Work will start in November on six-storey block for Leeds University
2 days ago

McLaughlin & Harvey lands Liverpool2 phase 2

£20m contract to expand deep water container terminal
2 days ago

Potash mine cash crisis forces construction slowdown

Developer has six months of cash left for construction
3 days ago

Investment bank to build 13-storey tech tower in Glasgow

Construction to start next year on new 270,000 sq ft building for JPMorgan Chase
2 days ago

Boost your online presence – join the Enquirer Directory

Site for suppliers and buyers showcases products, services and latest stories
1 year ago

Third contractor to finish jinxed school job

Local contractor Feltham Construction to complete Newbury school project
3 days ago

Aberdeen hospital project cost review as price soars

Graham final tender price reported to be 20% above original cost estimate
3 days ago

Sisk confirmed for £70m York Central civils

Firm will work up designs for a bridge, spine road and National Rail Museum rail link
3 days ago

Aldi plans new supermarket every week

840-store network to be expanded to 1,200 by 2025
3 days ago

Morrison to build £63m innovation hub in Kilmarnock

HALO to be build business centre on former home of Johnnie Walker whisky
3 days ago

Shapps halts woodland clearance during HS2 review

Transport secretary says woodland removal must wait for Oakervee review outcome
3 days ago

£800m Fawley oil refinery expansion to start this year

Ultra-low sulphur diesel plant will employ 800 during construction
3 days ago

Watkin Jones gets go-ahead for Leicester waterside scheme

Mixed student and rental flats scheme at Bath Lane approved
3 days ago

Balfour and Vinci JV signs £1bn HS2 station deal

Contract awarded while procurement challenge continues
3 days ago

Osborne chief operating officer exits

Rennie Chadwick departs as 16 jobs axed in Osborne streamlining
4 days ago

Dermot Clancy dies in tractor accident

Clancy Group joint chairman died at his home last Tuesday
4 days ago

Crossrail sparks in pay row as more workers flood Bond Street

Overtime rates of up to £67.50 an hour being offered to entice new electricians
4 days ago

Byrne back to profit after London tower orders

Multiplex skyscraper projects turnaround fortunes of framework specialist
4 days ago

Roofer killed in scaffold ladder fall

Court hears how scaffolding was erected by unqualified worker
4 days ago

World’s largest crane powers up at Hinkley Point

250m-tall Big Carl will be on site for four years
7 days ago

Contractor services