Balfour Beatty getting more selective on contracts

The company said it expected its order book to grow by over 5% in 2024, compared to the £16.5 billion (US$21 billion) backlog it had at the end of 2023.

In a trading update, it said that revenue would be around 2% of the £9.6 billion (US$12.2 billion) it generated in 2023.

Underlying profit from operations will be ahead of the £236 million it made in 2023 but lower profitability in its US construction operations will offset improved margins in the UK. Its support services business is expected to grow strongly, with revenue growth of 15% and margins at he top of its 6-8% range.

In the US, Balfour Beatty expects its order book to grow by over 10% in 2024, up from £5.7 billion (US$7.3 billion) thanks to increased orders from its buildings and civils business in the second half of the year.

The firm said it would take a selective approach to its civils work, working with long-term customers in areas where it has “proven expertise, strong teams and trusted supply chains”.

In the UK, where the company is working on the HS2 high-speed railway and new nuclear power station Hinkley Point C, it said that the new government’s commitment to invest in infrastructure is “encouraging” for the medium term.

In Asia, major airports have driven annual volumes of its Gammon business ahead of 2023 levels. New orders in the period included data centres in Hong Kong and Singapore and a civils contract in Hong Kong’s Northern Metropolis.

Leo Quinn, Balfour Beatty Group chief executive, said, “In 2024, the Group has once again shown the benefit of the geographical and operational diversity of our portfolio, delivering an encouraging overall performance. As a result, we are on track to deliver earnings growth in 2024.”