Balfour Beatty’s full-year profit outlook is raised as HS2 contractor rate increases boost Balfour Beatty
- Balfour Beatty anticipates that it will begin buying back additional shares starting next month
- Gammon, Gammon’s joint venture based in Hong Kong, has a record number of orders
- Contracts recently won by the company include two contracts worth up to £4 billion from SCAPE
Balfour Beatty has increased its annual earnings expectations because of rising interest rates and lower taxes.
Construction company will benefit from higher interest income growth in 2023, as central banks try to reduce rising inflation.
It also expects to start buying back additional shares from January once the current buyback program is complete this month, after which it will have returned more than £385 million to investors since the beginning of last year.
Big deals: Balfour Beatty has recently been named sole contractor for two UK civil engineering contracts worth up to £4bn from public procurement authority SCAPE
Balfour Beatty has won a number of contracts during that time due to the removal of Covid-19 restrictions. These contracts were for infrastructure projects in the UK and US.
In recent months, the group has been named the sole contractor for two UK civil engineering contracts worth up to £4bn from public procurement authority SCAPE.
The agreement includes the collaboration of the London-based company with local and national governments to complete projects in a variety of industries such as shipping, defense, and highways.
Other major orders won by the HS2 contractor include a seven-year contract worth nearly £300 million from East Sussex County Council to maintain roads and provide infrastructure services.
This contract is subject to an option to be extended for seven more years. It is also similar to the August deal with Buckinghamshire Council.
Outside the UK, the company has won a healthy number of significant orders in the US in 2022, the largest of which was a $700 million (£530 million) deal to build a parking lot and campus building in Fort Meade, Maryland.
After winning a contract for a 25-storey office building for Mandarin Oriental, Gammon’s Hong Kong joint venture now has a record book.
Balfour Beatty expects that revenues and total order book will be approximately 5 percent higher than they were 12 months ago. However, this is largely due to favorable exchange rate movements.
Leo Quinn is the CEO of the company. He stated: “We continue to expect strong financial and operational performance for the whole year.
“Looking to 2023 and beyond, our improved, risk-free and diversified order book gives us confidence that we will continue to make progress in delivering profitable managed growth.”
Balfour Beatty Shares Closed trading Thursday at 337 pence higher, indicating that their value has risen more than a quarter in the past quarter.
Victoria Scholar, head investment at Interactive Investor, stated: “Amidst market turmoil and macroeconomic headwinds Balfour Beatty has proven itself to be a stock-market winner this year.”