Balfour Beatty Construction more than halved its losses to £66m from £145m this time last year, its half-year figures show.
Overall, Balfour Beatty reported underlying profit before tax of £7m in the six months to 1 July compared to a £130m loss in the same period a year ago – a sign that new chief executive Leo Quinn’s overhaul would appear to be working.
The company said if it wasn’t for additional losses linked to historical projects, the construction business would have been close to break-even.
“Eighteen months into the first phase of Build to Last we have delivered our second successive half of underlying profitability and remain on track to achieve our initial targets of £200m cash in: £100m cost out.”
Leo Quinn, Balfour Beatty
It reported progress is being made on closing out the 89 problem contracts identified in 2015, with 81% of them at practical or financial completion as at June 2016.
The dividend has been set at 0.9 pence per share and is the first from Balfour Beatty since 2014. The company said its decision to streamline its business had paid off and reported an order book of £12.4bn, up 7% at constant exchange rates from last year. Underlying revenue was broadly unchanged at £4bn.
Quinn said the company was on track to deliver £200m of cash flow improvement and £100m in cost savings.
“By concentrating on our selected markets, we are growing our order book within a control environment which ensures that our business decisions lead to sustainable profit and cash growth,” he said.
The UK construction business made an underlying loss of £66m – also an improvement on last year’s figure for the same period, which saw a loss of £145m.
Quinn said: “We are now starting to see tangible benefits from the transformation of Balfour Beatty. Eighteen months into the first phase of Build to Last we have delivered our second successive half of underlying profitability and remain on track to achieve our initial targets of £200m cash in: £100m cost out.”
