Firm says it is 鈥榤aking progress鈥� on completing problem London resi jobs
Balfour Beatty has said it remains on track to match 2019鈥檚 underlying profit.
In a trading update this morning, the country鈥檚 biggest builder said it expected to post an underlying operating profit of 拢172m this year.
In August, the firm said its UK construction business had suffered a 拢23m loss in the first half, adding that problems on a number of fixed-price residential projects in central London meant it was pulling out of the sector.
At the time, it said a problem with cladding on one high-rise project could cost it 拢50m to put right. It declined to name the job only to say it won the deal in 2013. In June of that year, it landed a 拢110m scheme to build a 43-storey block called Providence Tower for Ballymore.
In this morning鈥檚 update, Balfour Beatty said 鈥減rogress [was] being made on the central London property projects鈥� and added: 鈥淥ne reached practical completion in the fourth quarter of this year and the remaining two contracts are still performing in line with the group鈥檚 expectations.鈥�
It said trading at its US construction business had returned to pre-pandemic levels although the group鈥檚 order book will be down on last year. The firm said it would be around 拢15.5bn this year, 拢900m less than at the end of 2020.
And the firm鈥檚 support services business, which had its target margins increased over the summer from 3%-5% to 6%-8%, was meeting expectations, it said.
Chief executive Leo Quinn said: 鈥淲e are strongly positioned in three geographies where fiscal expansion, green infrastructure growth and, in the US, public private partnerships all play to our unique engineering capability.鈥�
Average monthly net cash is expected to be over 拢650m for the full year, up from the 拢611m in the first half and more than 20% higher than the 拢527m at the end of last year. It said it had extended a 拢375m revolving credit facility until October 2024.
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