The Group’s earnings-based businesses have continued their upward trajectory in the first half of 2024, resulting in increased profitability and cash flow. This progress positions us well for securing future work that will drive further profitable growth in 2025 and beyond.
The outlook for our target growth markets, where we excel in delivering complex infrastructure projects, remains positive. In the UK, the new Government’s reinforcement of commitments to critical national infrastructure further strengthens our prospects. These favorable conditions give the Board confidence that Balfour Beatty will continue to deliver significant and attractive returns to shareholders in the years ahead.”
Continued Growth in Earnings-Based Businesses
- Revenue increased by 3% to £4.7 billion (2023: £4.5 billion), driven by growth in Support Services and Gammon.
- Underlying profit from operations (PFO) in earnings-based businesses rose by 6% to £101 million (2023: £95 million).
- Underlying Group PFO decreased by 4% to £77 million (2023: £80 million), due to higher Infrastructure Investments costs.
- Underlying earnings per share (EPS) grew by 18% to 15.3 pence (2023: 13.0 pence).
Consistent Performance and Earnings Growth Across a Diversified Portfolio
- Construction Services: PFO increased by 3% to £67 million, with growth in the UK.
- Support Services: PFO rose by 13% to £34 million, with full-year expectations towards the upper end of the 6-8% targeted margin range.
- Infrastructure Investments: A £7 million loss in the first half is expected to be offset by a £20-£30 million gain on disposals in the second half.
Strong Momentum in Growth Markets
- Significant new work initiated with key customers, including SSEN, National Grid, BP, and Rolls-Royce in 2024.
- Order book stands at £16.6 billion (FY2023: £16.5 billion), with first-half results supporting 2024 earnings growth.
- Earnings growth is expected to accelerate in 2025, with solid progress made in target markets.
Robust Balance Sheet and Cash Flow Supporting Attractive Shareholder Returns
- Average net cash of £735 million (FY2023: £700 million).
- Directors’ valuation of the Investments portfolio increased by 5% to £1.3 billion (FY2023: £1.2 billion).
- Half-year dividend increased by 9% to 3.8 pence per share (2023: 3.5p).
- A total of £60 million in dividends will be paid in 2024, with a £100 million share buyback on track to complete this year.
Financial Summary
- Revenue: £4,677 million (HY 2023: £4,527 million).
- Profit from earnings-based businesses: £101 million (HY 2023: £95 million).
- Profit from operations: £77 million (HY 2023: £80 million).
- Pre-tax profit: £98 million (HY 2023: £97 million).
- Profit for the period: £81 million (HY 2023: £74 million).
- Basic earnings per share: 15.3p (HY 2023: 13.0p).
- Dividends per share: 3.8p (HY 2023: 3.5p).
- Order book: £16.6 billion (FY 2023: £16.5 billion).
- Directors’ valuation of the Investments portfolio: £1.3 billion (HY 2023: £1.3 billion).
- Net cash (recourse): £785 million (HY 2023: £710 million).
- Average net cash (recourse): £735 million (HY 2023: £700 million).
Segment Analysis
- UK Construction: Revenue £1,458 million; PFO £34 million; PFO margin 2.3%.
- US Construction: Revenue £1,703 million; PFO £18 million; PFO margin 1.1%.
- Gammon: Revenue £714 million; PFO £15 million; PFO margin 2.1%.
- Support Services: Revenue £554 million; PFO £34 million; PFO margin 6.1%.
- Infrastructure Investments: Revenue £248 million; PFO £(7) million.
Notes:
- Revenue includes the share of joint ventures and associates.
- PFO refers to underlying profit from operations before non-underlying items.
- Net cash excludes non-recourse net borrowings, which include cash and debt within specific infrastructure investment project companies.
For further details, including the reconciliation of the Group’s performance measures to its statutory results, refer to the “Measuring Our Financial Performance” section.
