Balfour results can help “restore confidence” in construction

Grant Prior 5 years ago
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Balfour Beatty Group Chief Executive Leo Quinn is hoping the contractor’s latest set of positive half-year results can help “restore confidence to the whole construction sector.”

Leo Quinn has overseen a turnaround in the business
Leo Quinn has overseen a turnaround in the business

Balfour posted an underlying pre-tax profit of £64m for the first half of 2019 up from £56m last time as turnover rose to £3,881m from £3,836m.

The company continued to improve its cash position with average net cash increasing to £290m from £161m.

Quinn said the strong results and cash position make Balfour a “safe harbour” for potential clients as some rival contractors continue to struggle.

Balfour is positioning itself to take a significant share of major planned infrastructure work.

But the company is not booking in HS2 work yet while political doubts continue over the project’s future as new Prime Minister Boris Johnson reviews the scheme.

Balfour said: “On HS2, early contractor involvement (ECI) is ongoing on the main civils works, which were awarded as two-part design and build contracts in July 2017.

“Balfour Beatty VINCI won two Lots around Birmingham, N1 and N2, worth about £2.5 billion (Balfour Beatty 50%).

“These contracts are included in awarded but not contracted (ABNC) during the ECI period and will only be included in the order book on signing of the main civils works contracts.

“The joint venture team is currently working on the design and pricing of the two Lots, with the ECI work expected to be completed by the end of 2019.”

Turnover at the UK Construction division increased for the first time since Quinn introduced the Build to Last turnaround programme.

Revenue was up to £1,014m from £947m as underlying profits increased to £17m from £5m at a margin of 1.7%.

Quinn told the Enquirer: “We continue to be selective with out work and are often seen as a safe harbour by clients.

“Delay and procrastination is the enemy of contractors and of course we want to see major projects like HS2 go ahead.

“These results show that construction can deliver and should help restore confidence to the whole sector.”

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