Trading Statement

Balfour Beatty PLC
26 June 2007


26 June 2007


                               BALFOUR BEATTY PLC

                                 TRADING UPDATE
                                 ==============

Balfour Beatty plc, the international engineering, construction and services
group, is providing this trading update for the half year ended 30 June 2007 in
advance of its preliminary results announcement on 15 August 2007.

In the first half of 2007, the Group's trading performance has been strong and
somewhat above expectations. Markets have remained positive and our order book
has continued to grow before taking account of the consolidation of the order
backlog of Balfour Beatty Construction LLC (formerly Centex Construction), the
acquisition of which was completed at the end of March. Cash generation
continues to be satisfactory.

In the Building sector, progress has been good, with order intake and activity
levels particularly strong in the UK building construction business and work
proceeding satisfactorily on a range of major projects. The new facilities
management contracts for the Department for Work and Pensions and the
Metropolitan Police have been mobilised successfully.

Balfour Beatty Construction LLC performed at anticipated levels and continued to
win good quality work, including further military housing projects, a market in
which it is a leader.

In the Engineering sector, progress has also been good, with continuing
improvement in Gammon in Hong Kong and in US civil engineering and satisfactory
performance in UK civil engineering, utilities contracting, road maintenance and
in Dubai.

In Rail, trading has been significantly stronger than in the first half of last
year, with good progress made on the major works on the rail system at Heathrow
Terminal 5 for BAA, renewals work for London Underground and Network Rail and
the East London Line for Transport for London.

In the Investments sector, performance, as anticipated, reflects our decision to
take no profit from our investment in Metronet during the period. In addition,
we have continued to invest in the extension of Balfour Beatty Capital's
business in the UK beyond the PPP market and also in start-up PPP businesses in
the US, Hong Kong and Germany.

The acquisition of Exeter International Airport was completed early in the year.
Subsequently, 40% of the equity invested in this asset has been sold to Galaxy,
the international transportation equity investment fund, for £12 million. During
the first half of the year, we have been appointed preferred bidder for the £152
million Fife Hospital and the £140 million Building Schools for the Future
concession in Islington and the £36 million Derby Street Lighting Scheme reached
financial close. We anticipate the achievement of financial close for the £311
million Pinderfields and Pontefract Hospital in the very near future.

There will be a number of exceptional items in the half year accounts.

An application for an Extraordinary Review of Metronet's BCV concession was
announced on 21 June. The value of our investment in Metronet is dependent on
the outcome of Extraordinary Review and Metronet's ability to maintain the
necessary funding levels in the period before the outcome is known.

Given the uncertainties pending the outcome of the Review, the level of
unanticipated costs associated with the concessions' capital programmes and
Metronet's funding position, we have decided to take an exceptional charge in
respect of Metronet of approximately £100 million, representing the equity
invested in the Metronet concessions, the profits recognised in respect of these
investments in prior years and certain other, related issues. All anticipated
costs relating to the downstream contracting activities which we carry out on
behalf of Metronet have been provided for.

Balfour Beatty remains committed to Metronet and to the creation of a
world-class underground system for London.

This charge will be very substantially offset by two major exceptional credits.
The completion of the sale of our 24.5% interest in Devonport Dockyard, which
awaits final consent from the Ministry of Defence, will create an exceptional
gain of approximately £50 million. In addition, consequent to the acquisition of
Centex Construction, the crystallisation of the benefits of tax losses in the
US, which have to be recognised in full under IAS 12, will result in an
exceptional gain of approximately £40 million.

As stated in our Annual Report and in our statement made at the time of our AGM,
we continue to make good progress in pursuing our strategic priorities through
investment and acquisition and continue to add to our earning power as a result.
We expect to make very good progress in 2007 as a whole.

                                      ENDS

Enquiries to:

Tim Sharp
Tel: [phone]
www.balfourbeatty.com




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