Trading Statement

RNS Number : 0857Y

Balfour Beatty PLC

02 July 2008

 



2 July 2008

                                                                                              BALFOUR BEATTY PLC

                                                                                      HALF-YEAR TRADING UPDATE

Balfour Beatty plc, the international engineering, construction, services and investment group, is providing this trading update for the half-year ended 30 June 2008 in advance of its interim results announcement on 13 August 2008. 

TRADING

Further to our Interim Management Statement of 15 May 2008, trading in the year to date continues to be strong. A number of major new orders, referred to in our May statement, have been secured across our business sectors and geographical markets. Since that time we have also secured the $330 million 281 North Toll Project in San Antonia, Texas.  At the end of May, our confirmed order book had increased since the end of 2007 by £400 million to £11.8 billion.  This excludes the impact of consolidating the order books of our 2008 acquisitions.

Our overall future work pipeline has also grown substantially with, for example, our appointment as preferred bidder for the M25 PPP widening and maintenance project.

SECTOR PERFORMANCE

Sector performance, outlined below, is in line with that reported on 15 May 2008.  

Good progress in the Building sector is continuing, with particularly strong performances in Balfour Beatty Construction in the US and the UK, Mansell and Haden Building Management, which secured a substantial extension to its facilities management contract for BT during the period.

Very good progress has also continued in Engineering, with particularly strong performance in the existing UK regional civil engineering network, now augmented by Dean & Dyball, and in Dubai, where we anticipate the revenues of our joint venture to be approximately £0.7 billion in 2008.

Progress in Rail is also good as market prospects continue to improve, although the period has not benefited from one-off settlements of historic projects as was the case in the first months of last year.

In the Investments sector, we continue to make substantial commitments in new PPP projects, in addition to developing our infrastructure asset business and our PPP bidding capability outside the UK. Our existing concessions continue to perform at anticipated levels.

ACQUISITIONS AND INVESTMENTS

Further steps have been taken to increase the Group's earning power since our 15th May statement, in which we referred to the acquisition of GMH Military Housing (now Balfour Beatty Communities), the US PPP and facilities management specialist; Dean and Dyball, a leading UK regional contractor and Blackpool International Airport.

On 15th May 43,320,411 new ordinary shares in the Company were placed with institutional investors, realising gross proceeds of £186 million. This equity was raised to deliver incremental 

growth through additional bolt-on acquisitions and organic growth opportunities in our key strategic investment areas, following substantial expenditure on acquisitions since January 2007.

Since the placing, Balfour Beatty has completed the acquisition of Barnhart, a leading Californian construction management company for $116 million, which enhances the Group's already strong position in the US education market and in California. We have also agreed to acquire Schreck-Mieves, the German rail engineering group, for €36 million, which gives the Group a strong position in the German trackwork market and enhances its ability to deliver major multi-disciplinary rail projects in Germany.

OUTLOOK

We anticipate that order intake and trading performance will remain strong throughout the year and that we will make good progress in 2008.

                                                                                                        ENDS

Enquiries to:    Tim Sharp

                       Tel: [phone]

                       www.balfourbeatty.com

 

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