Firm returns 拢19m ahead of paying out shareholder dividends

Balfour Beatty has paid back the 拢19m it received in furlough money from the government last year 鈥� after previously saying it wasn鈥檛 planning to do so.

Last December, the country鈥檚 biggest contractor said it would be paying a dividend on the back of its 2020 performance but said it was not planning to return the money which was used to help pay the wages of 3,000 employees 鈥� around a quarter of its UK workforce 鈥� it put on the government鈥檚 Job Retention Scheme.

leo quinn

Chief executive Leo Quinn said covid鈥檚 impact meant that its airports鈥� work had slowed 鈥榯o a trickle鈥�

But this morning chief executive Leo Quinn confirmed it had returned the money, ahead of the firm paying out a 1.5p per share dividend to shareholders and returning 拢150m to shareholders in a share buyback programme during this year.

The move means Balfour Beatty joins its peers including Morgan Sindall, Galliford Try and Keller who have all decided to return furlough money before paying out dividends.

Quinn said the firm had not been forced into the U-turn and added: 鈥淣o one raised it with me. The decision was a pragmatic one. The uncertainty of the pandemic has been removed, we have surplus cash and I think it鈥檚 the right thing all round.鈥�

The firm was forced to shut around 20% of its 800 sites in the UK last year as the pandemic struck with jobs in Scotland more affected because of the country鈥檚 tighter lockdown restrictions.

Quinn said the market was recovering from the initial shock of the pandemic last spring but added that its aviation business had borne the brunt of covid鈥檚 impact.

鈥淎viation has been by far the hardest hit. We were doing hundreds of millions [of pounds] at Heathrow and Gatwick and that has reduced to a trickle.鈥�

The slowdown in airports work helped send its UK construction business to an underlying 拢26m loss on turnover of 拢2.1bn although its order book more than doubled to 拢6.4bn thanks to its work on the HS2 railway, which includes building a new station at Old Oak Common in west London, being confirmed.

Quinn said the firm, which has rejigged it senior leadership at London following the departure of Graham Hill earlier this year, was sticking with the buildings market in the capital 鈥� despite a slowdown in the city.

鈥淲e鈥檙e talking to established customers and clients. I think London will take a year or two to settle down but we鈥檒l be there and present.鈥�

Overall group revenue edged up 2% last year to 拢8.6bn but pre-tax profit slipped from 拢138m to 拢48m. However, Quinn said the firm would be back to 2019 levels this year where underlying profit was 拢172m.

The firm said average net cash for the year was up from 拢325m to 拢527m while its order book now stands at a record 拢16.4bn.

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