Trading Statement

Balfour Beatty PLC
12 January 2007



12 January 2007

                               BALFOUR BEATTY PLC
                               ==================

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


Balfour Beatty plc, the international engineering, construction and services
group, is providing this update on trading for the year ended 31 December 2006
in advance of its preliminary results announcement on 7 March 2007.

It is anticipated that performance for the year will be in line with
expectations.

In 2006, Balfour Beatty's leading positions in its principal markets of
healthcare, education, road and rail transport, utility systems, privately
financed projects and social housing continued to offer substantial opportunity.
During the year, the Group's order book grew by some 20% to approximately £9
billion.

The future earnings potential of the Group was further enhanced by acquisitions
in the US building, UK rail and UK civil engineering sectors and by successes
for our investment business in the education, healthcare and airport sectors.

Operating cash flow was, again, very satisfactory.


SECTORS
=======


Building
--------

In the building sector, progress has been good. Our building construction
businesses improved their overall performance despite the impact of some issues
related to the delivery programme under the London Underground PPP which also
had an effect in the engineering sector. In building services, markets and
performance have remained strong. In facilities management, we secured over £650
million of potential new work during the year, including major new long-term
contracts for the Department for Work and Pensions and the Metropolitan Police.
Heery in the US continued to grow successfully following the acquisition of
Charter. We anticipate a number of preferred bidder positions on major PPP
contracts to be converted to contract during the current financial year.


Engineering
-----------

Performance in the engineering sector continued to improve, with good progress
in the electricity, gas and water utility businesses. During the year we were
appointed preferred partner for the £550 million Eastern Electricity Alliance by
National Grid. There were also good performances in professional services, road
management and maintenance and the Group's joint ventures in Hong Kong and Dubai
where major project work progressed well. There were further reorganisation
costs in Balfour Beatty Construction Inc in the US, although underlying
performance is on an improving trend. In civil engineering, good progress has
been made in regional contracting and on three of the Early Contractor
Involvement road schemes for the Highways Agency. A £115 million contract for
the Northern Ticket Hall at Kings Cross Station was secured. Birse, the UK
regional civil engineering contractor was acquired in July and its integration
into the group has proceeded well.


Rail
----

In the rail sector, there was a strong recovery in the second half following a
relatively weak first half year. While revenues from work on the UK overground
network were flat, good progress was made on rail projects for BAA at Heathrow
Terminal 5 and for Metronet on the London Underground where the complete
refurbishment of the Waterloo and City line was completed successfully. In the
US, performance improved following last year's second-half losses and the
international rail electrification business made good progress, particularly in
Germany and Italy. The modernisation of the Metro System in Porto was
successfully completed. In October, the group was awarded the £363 million
contract for the new East London Line.


Investments
-----------

Very satisfactory progress was made in the investments sector. Both the
Birmingham Hospital and Birmingham Schools PPP projects reached financial close.
Balfour Beatty Capital was successful in securing preferred bidder status on
Exeter Airport, an acquisition completed in early January, and for the Knowsley,
Merseyside, Building Schools for the Future project. The hospital projects in
Manchester and Pinderfields which are at preferred bidder stage, moved forward
satisfactorily. Progress on the Metronet concessions continued to be mixed and
substantial changes to the procurement and delivery system are in the process of
finalisation. PPP businesses have now been established in Germany, Hong Kong/
Singapore, and the US, where we have been shortlisted for the Oakland Airport
Connector project.

Barking Power had a very good year, with high availability and a favourable
price regime.


OUTLOOK
-------

Trading prospects in our key sectors remain positive. We anticipate that the
Group will continue to make good progress in 2007.

                                        
                                      ENDS
                                        

Enquiries to:
-------------
Tim Sharp
Tel: [phone]

www.balfourbeatty.com






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