Balfour Beatty shrugs off Carillion hit to see profits more than double
The group reported underlying pre-tax profits of £196 million for 2017 – up from £69 million the previous year.
Construction giant Balfour Beatty has reported annual profits more than doubling despite a £44 million hit from the collapse of Carillion.
The group behind the Crossrail project has reported underlying pre-tax profits of £196 million for 2017 – up from £69 million the previous year.
Its profit leap comes even though it took a £44 million charge on the delayed Aberdeen Western Peripheral Route (AWPR) – a joint venture with Carillion and Galliford Try, which is now due to complete in the summer.
The group also said it had hired more than 150 employees following the Carillion liquidation, taking on staff who had worked alongside Balfour AWPR, A14 or Manchester Smart Motorway joint ventures.
Boss Leo Quinn said the results “clearly demonstrate that our build to last programme is transforming Balfour Beatty”.
On a bottom line basis, pre-tax profits jumped to £117 million from £10 million a year earlier, while the UK construction arm posted operating profits of £16 million against losses of £65 million in 2016.
It marks its second year in the black for Balfour under an overhaul being led by Mr Quinn, having previously suffered hefty losses.
Its results showed the firm’s order book fell once again, down 8% at £11.4 billion, with Balfour putting it down to an ongoing drive for “selective bidding at appropriate terms for those projects best aligned with its capabilities”.
Shares lifted 2% after the results.
Analyst Howard Seymour at Numis Securities said: “There are many tangible illustrations of the changed fortunes of Balfour Beatty, from the near trebling of pre-tax profits and one-third increase in dividend to the positive working capital movements and improved average net cash profile.
“In our view this sets the base for the movement back to industry-standard margins this year.”