Trading Statement

Balfour Beatty PLC
14 January 2008


14 January 2008

                               BALFOUR BEATTY PLC
                                 TRADING UPDATE
                                 --------------

Balfour Beatty plc, the international engineering, construction, services and
investment group, is providing this update on trading for the year ended
31 December 2007 in advance of its preliminary results announcement on 5 March
2008.

Trading in the second half of the year in all parts of the Group has been strong
and there have also been good settlements on some completed projects. The
Group's cash position remains strong.

It is anticipated that 2007 results will be at the top end of current
expectations.

Balfour Beatty's leading positions in its principal markets of healthcare,
education, road and rail transport, utility systems, privately financed projects
and social housing were further strengthened during the year and we have
continued to grow our portfolio of high quality, long-term business. Major, new,
long-term contracts were secured with British Energy, National Grid, the US
Department of Defense and the US Federal Bureau of Prisons, amongst others.

At the year end, our order book stood at approximately £11 billion, 20% ahead of
the level 12 months ago. In addition, almost £2 billion more work is at
preferred bidder stage.

The earnings potential of the Group was further enhanced during the year through
acquisitions in US and UK building, facilities management, professional and
technical services and international rail, and through investments in Exeter
International Airport and five new UK PPP concessions.

SECTORS

Building

Performance in the building sector moved ahead very strongly during the year.
Progress in UK building construction has been good in all markets and our
regional coverage was further extended through the acquisition, in August, of
Cowlin Construction, which is a major player in the south and south west of
England and Wales.

Our mechanical and electrical engineering businesses continued to perform well.
In UK facilities management, profitable growth has continued, enhanced from
October by the acquisition of Covion, the fast-growing integrated technical
services company.

In the United States, the performance of our professional and technical services
business was again good and its expansion continued through selective
acquisition. Balfour Beatty Construction US, acquired as Centex Construction at
the end of March, has given us a very strong presence in regional US building
markets and has performed above our expectations at the time of acquisition.

Engineering

Progress in the engineering sector has also been very strong in 2007. The UK
civil engineering businesses continued to deliver good results, augmented by a
full year's performance from Birse, acquired in 2006. Our power, water and gas
utility businesses made strong progress during the year. In the latter part of
the year, they were merged to form Balfour Beatty Utility Solutions, with a new,
customer-focussed structure designed to better meet utility customer
requirements. Our road management and maintenance business also continued to
perform well in a changing market.

Balfour Beatty Management continued to grow strongly during the year. It now
forms an integral part of the majority of the Group's major UK bids and acquired
two specialist UK consultancies during the year.

Our engineering businesses outside the UK also made strong progress. In the US,
Balfour Beatty Infrastructure Inc returned to profit, with all its constituent
parts making good progress, and is well placed to grow from a stable base. In
Dubai, profits improved in a strong market and we secured a number of major new
building, civil, mechanical and electrical engineering contracts. Performance in
Gammon also improved significantly, with particularly good progress being made
in Singapore and Macao. Last week, Gammon was awarded the £320 million project
to build the new government complex in Hong Kong.

Rail

We continued to make good progress in rail. Our UK rail projects, renewals,
track systems and plant businesses performed well in a largely flat market. We
were pleased to be confirmed as one of Network Rail's four long-term renewals
contractors and, despite Metronet's entry into administration, our work as LUL's
rail renewals and maintenance contractor is continuing.

Outside the UK, our high speed rail electrification and power supply business
continued to perform well and a number of small acquisitions and joint venture
agreements have extended the business's capabilities, particularly in signalling
technology and in the Nordic Region, where we now lead the market. In the US,
our performance improved and some further reorganisation has put the company in
a good position for profitable growth.

Investments

2007 was a year of good progress in the investments sector, although, as
previously stated, results will be impacted by the absence of profits from the
Metronet PPP contract.

Preferred bidder status was achieved for the Building Schools for the Future
contract in Islington and the Carlisle Northern Development Route. Preferred
bidder positions on PPP hospital projects at Pontefract and Pinderfields,
Tameside and Salford, a major schools project at Knowsley on Merseyside and the
Derby street lighting project were converted to contract.

Barking Power again performed strongly in 2007. The acquisition of Exeter
Airport was completed early in the year, as the Group seeks to build a UK asset
investment portfolio beyond the PPP concession market.

During the year, we were appointed preferred bidder for the Institute of
Technical Education College West project in Singapore, our first PPP project
outside the UK. Substantial and increasing investment in establishing PPP
businesses and bidding projects in the US, Germany and South East Asia will
create substantial value to the Group in due course.

EXCEPTIONAL ITEMS

As announced in the half year results, there will be a number of exceptional
items, most notably charges relating to the entry of Metronet into
administration and credits arising from the sale of our interest in Devonport
Royal Dockyard and the crystallisation of US tax benefits. In aggregate, these
are likely to result in a small exceptional charge for the year.

OUTLOOK

Trading prospects in our key sectors remain positive. We anticipate that the
Group will continue to make good progress in 2008.

                                      ENDS

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



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