Trading Statement

RNS Number : 0575V

Balfour Beatty PLC

03 July 2009

 



3 July 2009

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 27 June 2009 in advance of its half-year results announcement on 12 August 2009.

Trading

Further to our Interim Management Statement of 14 May 2009, trading performance in the year continues to be in line with expectations, underpinned by continued infrastructure expenditure by our customers, the benefit of acquisitions and our tight control of costs. 

We continue to have a high-quality order book, which, at the half year, is expected to be broadly in line with the £12.8 billion reported for 31 December 2008.   

Our cash position remains strong with average net cash in excess of £200 million for the first six months of 2009.  

Sector Performance

Performance in the Building sector has exceeded last year, with the UK steady and the US strong. In spite of a more competitive environment for securing new work, there have been good performances from Balfour Beatty Construction US and Heery with major new contracts in North Carolina, Texas and California. The integration of RT Dooley, a family-owned construction firm based in North Carolina acquired in February 2009 for $40 million, is proceeding well.

In the Engineering sector, performance in UK civil engineering has been strong and we have made good progress on road projects including the M74, A3, A421 and A46.  Following financial close, work started in May on the construction contract to add 40 lane miles of additional capacity to the M25.  In the US, we secured the five-year contract to support the delivery of National Grid's US electricity transmission capital investment programme in New England.  Performance in Dubai and Hong Kong has been in line with expectations.  Earlier this week, Gammon Construction announced it had been awarded a contract in excess of HK$1.5 billion (£120 million) for the redevelopment of the Hennessy Centre in the Causeway Bay district of Hong Kong.

In Rail, as expected, reduced volumes in some parts of the UK market have impacted the start of the year, with Germany also down on last year.  We recently secured a two-year, £130 million extension to our track renewal alliance contract with London Underground and an £80 million extension to a track renewal contract with Network Rail.  Good progress has been made in other parts of the business including in Italy on the Bologna to Florence high-speed line and in Malaysia with the signing of a rail electrification and power supply project.

In the Investments sector, we have reached financial close in the first half of the year on three of the four PPP projects at preferred bidder stage, including the £170 million Fife General Hospital and the £200 million Southwark Schools for the Future programme. As part of the Connect Plus consortium, we also reached financial close for the £6.2 billion design, build, finance and operate (DBFO) contract to provide additional capacity and to maintain the M25 motorway. We expect to reach financial close on the Carlisle Northern Development Route project shortly.  Balfour Beatty Communities is performing as expected and Barking Power has made a strong start to the year.

Outlook

Our strong market positions, the resilience of our business model and our high-quality order book mean that we anticipate making progress in 2009.

ENDS

Enquiries:

Duncan Murray

Tel: [phone]

www.balfourbeatty.com

Notes to Editors:

Balfour Beatty is a world-class engineering, construction, services and investment business, well-positioned in infrastructure markets which offer significant long-term growth. We work in partnership with sophisticated customers who value the highest levels of quality, safety and technical expertise. Our skills are applied in appropriate combinations to meet individual customer need. Balfour Beatty's financial position, with significant net cash and with strong operating cash flows, offers continuing flexibility to add additional capacity and expertise to the business mix and to make appropriate investments in PPP and other long-term growth opportunities.

 

END

 

 

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