Balfour sees fourth successive year of share buybacks


Balfour Beatty has published a trading update for FY2023 – confirming its fourth successive year of share buybacks. 

Credit: Balfour Beatty.

Group revenue for the financial period to 7 December 2023 is expected to be 5 per cent ahead of the prior year (FY2022: £8.9 billion). 

This was due to greater volumes on HS2 in the UK, as well as a strong operational performance at Balfour’s Asian joint venture Gammon Construction and increased activity on airport projects in Hong Kong. 

“In the UK, the HS2 works at Area North and Old Oak Common continue to progress well,” wrote the group. “The group’s order book was unaffected by the government’s decision to cancel HS2 Phase 2, which had yet to be contracted.” 

In America, Balfour’s construction business saw a stronger second half of the year than the first, with two commercial real estate projects in Texas totalling $800 million and $300 million of additional federal work in Washington DC. 

Balfour’s order book at year end is predicted to be marginally higher than the £16.4 billion reported during its half-year results.  

Underlying profit from operations is expected to be in line with FY2022 (£232 million). 

Average monthly net cash continues to be between £650 and £700 million. 

Contract wins  

Balfour Beatty Living Places was recently awarded a £330 million six-year highways maintenance contract extension by Lincolnshire County Council. 

In October, Balfour’s rail business was awarded a £43 million contract by Transport for London, to deliver essential upgrade works on the London Underground’s Piccadilly line. 

And in August, the group’s power transmission and distribution team became one of ten preferred bidders on SSEN Transmission’s £10 billion Accelerated Strategic Transmission Investment (ASTI) framework. 

It added from 2024 it is expecting orders in the power business to grow. 

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In November, Balfour sold its stakes in two assets from its infrastructure investments portfolio for nearly £26 million.   

The group offloaded its 49.5 per cent interest in UBB Waste (Gloucester) Holdings Limited, the owner of the energy-from-waste facility at Javelin Park near Gloucester (UK), to Urbaser Investment Limited.  

While in the US it sold its 50 per cent stake in the Moretti multifamily housing community in Birmingham, Alabama, to Henssler Capital. 

Balfour said 2023 investment in new and existing projects is expected to be around £45 million. 

Shares and dividends   

Once the 2023 share buyback programme completes this month, £595 million will have been distributed to shareholders since the start of 2021.  

From January, the group will buy back more shares ahead of confirming the amount for its 2024 share buyback in its full-year results in March. 

“Balfour Beatty’s solid performance has continued in the second half of the year and the board remains confident that the group will achieve our expectations for the full year,” said Balfour Beatty group chief executive, Leo Quinn. 

“We are pleased to confirm our fourth successive year of share buybacks in 2024, as our large order book, unique capabilities and balance sheet, provide a strong platform for continuing future shareholder returns.” 

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