Trading Statement

RNS Number : 5876L

Balfour Beatty PLC

14 January 2009

 



14 January 2009

BALFOUR BEATTY PLC TRADING UPDATE

Balfour Beatty plc, the international engineering, construction, services and investment group, is providing this update on trading for the year ended 31 December 2008 in advance of its preliminary results announcement on 5 March 2009. 

TRADING

Trading overall was in line with our Interim Management Statement on 4 November 2008, when we indicated that we expected 2008 to be a year of strong progress, and continues to demonstrate the resilience of our business model.

Our balance sheet and financial position remain strong, with average net cash for the second half of the year being circa £250m.  

At the year end our confirmed order book increased from the £12.1 billion order book reported at the half year, with robust order intake and a number of further significant prospects likely to be secured in 2009.

SECTOR PERFORMANCE

In the Building sector there was strong overall growth in 2008, driven by the performance of acquisitions and the strength of our business with public sector and regulated customers which, in both the UK and the US, accounts for most of our work. This performance has been achieved in spite of the slowdown in private sector work and the write-down of a building services project.  In addition, our facilities management business continues to grow strongly.  

Growth in the Engineering sector has continued to be very strong in 2008. The UK civil engineering businesses delivered good results, with a substantial forward order book. Our utility business has made good progress during the year and has further developed its overseas power transmission business. Balfour Beatty Management continues to grow strongly, particularly in supporting cross-group activities for our major customers. Outside the UK, our business in Dubai performed well, particularly in infrastructure projects, despite a considerable slowdown in the market and a cautious view of project recoveries. Performance in Gammon was steady and profitability has continued to improve in the US.

In Rail there has been steady progress. There was another good result from our international high-speed rail electrification and power supply business, now strengthened by the acquisition of Schreck-Mieves in Germany, which is performing as expected, and the award of the contract to design, build and commission the railway systems in the Gotthard Tunnel in Switzerland. There has also been further improvement in the US business. However, this is offset by the UK, where profit is slightly down on last year, principally due to the timing of some settlements.  

In the Investments sector, Balfour Beatty Communities, the market leader in the military accommodation PPP concession market in the US, performed well and in line with our expectations at the time of acquisition. Balfour Beatty Communities recently acquired interests in Phases I and II of Lackland Air Force Base in Texas.  In infrastructure investments, the strong performance of Barking Power has continued. We anticipate reaching financial close on our four preferred bidder PFI projects in the UK in the first half of 2009, despite the challenges presented by current financing markets. 

OUTLOOK

We have benefited in 2008 from continued growth in infrastructure expenditure, particularly in education and healthcare, and finish the year with a strong order book. 

As a result, despite the difficult economic environment, we anticipate making progress in 2009.

ENDS

Enquiries to:

Duncan Murray

Tel: [phone]

www.balfourbeatty.com

Notes to Editors:

Balfour Beatty is a world-class engineering, construction, services and investment business, well-positioned in infrastructure markets which offer significant long-term growth. We work in partnership with sophisticated customers who value the highest levels of quality, safety and technical expertise. Our skills are applied in appropriate combinations to meet individual customer need. Balfour Beatty's financial position, with significant net cash and with strong operating cash flows, offers continuing flexibility to add additional capacity and expertise to the business mix and to make appropriate investments in PPP and other long-term growth opportunities.

 

END

 

 

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