Balfour Beatty swings back into profit
Balfour Beatty has swung back into profit as the construction firm's turnaround under boss Leo Quinn continues to pick up pace.
Pre-tax profit came in at £8 million in the twelve months to December 31, compared with a £199 million loss last year after the firm was held back by onerous construction contracts that delivered poor returns.
Underlying revenue rose 4% to £8.5 billion as Balfour's order book was boosted 15% to £12.7 billion.
Mr Quinn, who has been cutting costs under his Build To Last programme, said: "The transformation of Balfour Beatty is well under way. We have returned the group to profit and significantly exceeded our Build to Last phase one targets.
"All this positions us for future profitable growth."
The group was also boosted by its biggest US contract win to date last year, inking a £524 million deal to electrify 52 miles (84km) of California's railway.
The company will lay the infrastructure for new high-speed trains along the Caltrain rail corridor which runs across 17 cities between San Francisco and San Jose.
The deal is being hailed for opening the door to the US market as US President Donald Trump makes infrastructure spending one of his main priorities.
Balfour added: "The trading environment in the Group's core UK and US markets remains positive.
"In the UK, government policy is helping to drive a strong pipeline of major infrastructure projects in transport and energy.
"In the US, the new administration has made infrastructure one of its key priorities.
"This positive market backdrop supports the group's commitment to be more selective, targeting contracts with improved profitability and cash flow dynamics."
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "Balfour seems to be building momentum. Having spent years creaking under the strain of loss-making historical contracts, 2016 has seen the return of both profits and dividends.
"If the group pulls off its recovery plan, it will be another feather in the cap of CEO Leo Quinn, who, having started his career at Balfour Beatty, has already performed minor miracles in returning Qinetiq and De La Rue to something approaching good health. These results suggest he's well on the way."
Shares were down 2% to 277.8p in morning trading.