Trading Statement

Balfour Beatty PLC
11 January 2006


11 January 2006


                               BALFOUR BEATTY PLC
                               ==================

                                 TRADING UPDATE
                                 --------------

Balfour Beatty plc, the engineering, construction and services group, is
providing this update on trading for the year ended 31 December 2005 in advance
of its preliminary results announcement on 8 March 2006.

In 2005, Balfour Beatty's leading positions in its principal markets of
healthcare, education, road and rail transport, utility systems,
privately-financed projects and social housing continued to generate significant
opportunity. During the year, the Group's order book grew by 13% from £6.8
billion to approximately £7.7 billion, with approaching £1.2 billion more work
at preferred bidder stage, including, most notably, the £520 million Birmingham
Hospital PFI project. Operating cash flow was again very satisfactory.

It is anticipated that performance in 2005 will be in line with expectations.

There is likely to be a net exceptional profit. The receipt of initial
distributions by Barking Power from the administrators of TXU Europe and the
gain on disposal of a 15% interest in three PFI road schemes will be partly
offset by costs arising from the purchase of preference shares and the costs of
repaying a term loan and settling a legacy legal issue in the US.

Sectors
-------

In Building, there was another good performance from Mansell and satisfactory
progress in other operating companies, including Balfour Beatty Construction
whose profits have recovered strongly in the second half following the contract
losses which were reported at the interim results. Order intake in the building
sector has strengthened further in the year with the conversion to contract of
PPP schools projects in Scotland and Nottinghamshire and a wide range of other
successes in the social housing, accommodation, healthcare and commercial
sectors.

In Engineering, progress has been very satisfactory with particularly strong
performances from RCS, the road manager and maintainer, and Balfour Beatty Power
Networks. Results in Balfour Beatty Construction Inc in the US showed
significant improvement following the closure of its heavy marine engineering
division. During the year, order books grew substantially, with a number of
major long-term contract wins in the UK utilities and roads sectors and for
Gammon in Hong Kong.

In Rail, performance was good in the UK and in the international rail
electrification business, but reflected a first full year without UK maintenance
profits and the continued impact of contract difficulties in the US. There were
encouraging contract wins for a further section of the West Coast Main Line
upgrade, a major rail link in Australia and for the continuing provision of
track plant machines to Network Rail. Activity levels under major track renewal
contracts for Network Rail and under the London Underground PPP were
satisfactory.

In Investments, performance has continued to be good following the major step
forward made in 2004. During 2005, new concessions came on stream for the M77
motorway in Scotland, major schools schemes in North Lanarkshire and Bassetlaw
and a street lighting scheme on Tyneside. Financial close is anticipated in 2006
for the Birmingham Hospital and Birmingham Schools schemes and for the
Pinderfields & Pontefract and the Northern Batched hospitals schemes. The
operational performance of Metronet was broadly satisfactory. Plans are in hand
to address delays in the capital expenditure programme, most particularly in
stations upgrade.

In two separate transactions, the Group's shareholding in the Edinburgh Royal
Infirmary concession was increased from 42.5% to 73.9% and a 15% interest in
three of Connect Roads' projects, previously 100% owned, was sold.

Outlook
-------

We believe that our trading environment will continue to be healthy during 2006
and that the Group will make further progress during the year.

                                      ENDS

Enquiries to:
Tim Sharp
Tel: [phone]
www.balfourbeatty.com





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