Balfour Beatty
Balfour Beatty confident for full year as current trading remains in line
Engineering, construction and services group Balfour Beatty PLC (LSE: BBY) said it expects to make progress in the current year as it reported that trading performance in 2009 continues to be in line with expectations, underpinned by continued infrastructure expenditure by its customers, the benefit of acquisitions and tight cost control.
In a trading update ahead of results for the first half to June 27 2009, the group said it continues to have a high-quality order book, which, at the half year, is expected to be broadly in line with the £12.8 billion as at December 31 2008.
The cash position remains strong with average net cash in excess of £200 million for the first six months of 2009.
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 US$40 million, is proceeding well.
In the Engineering sector, performance in UK civil engineering has been strong and Balfour Beatty has 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, it 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.
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.
Good progress has been made in other parts of the business including in Italy on the Bologne to Florence high-speed line and in Malaysia with the signing of a rail electrification and power supply project.
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