Top 5 reasons Balfour Beatty’s share price increased 38% in six months

1. Share buybacks

Balfour Beatty initiated a share buyback programme in January this year, starting with £50 million, before increasing it to £125 million by mid-March. In the first half of the year alone, the company repurchased 14 million shares for £65 million, amplifying demand and signalling confidence in its valuations.

2. Strong financials and record orders

The group order book has surged to a record-breaking £19.5 billion. This is anchored by major infrastructure contracts, primarily across the UK and US. Notable projects include the £833 million Net Zero Teesside Power contract, civil works for Sizewell C, the £690 million Skye 132kV reinforcement contract, and major transport projects like the M3 Junction 9 scheme, as well as work for Network Rail.

3. Consistent earnings growth and dividend increases

Balfour Beatty is benefiting from sustained earnings growth, as reported by the Financial Times. For 2024, earnings per share were above 43 pence, marking a notable 17 per cent increase on the previous year. The group has also raised its dividend and analysts expect a further growth in payouts for the upcoming year.

4. Resilience despite sector risks

In a difficult construction economy, and losses on certain projects, particularly in the US, the underlying strength of the order book and financials overshadow any short-term setbacks. This gives investors confidence Balfour Beatty is well diversified, and able to withstand upcoming market challenges.

5. Leadership, turnaround, new beginnings

People tend to forget more than 10 years ago Balfour Beatty was in a state of turmoil, with warnings of £120 million-£150 million profit shortfalls. But, under former chief executive Leo Quinn, the company underwent a turnaround programme called “Build to Last , and is now going from strength to strength. Since 2014, Balfour Beatty’s share price has multiplied, and nearly £1 billion has been returned to shareholders through dividends and buybacks. With strong order books and talented leadership comes investor confidence.

Now the responsibility falls to new chief executive officer (CEO) Philip Hoare, who recently succeeded Quinn, to lead the next chapter for the industry giant.

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