Selling a pair of mature infrastructure assets made Balfour Beatty a £52m profit, a bit more than expected, which nudged profits past most City forecasts. The group's professional services division did well, too, offsetting a dearth of construction work and keeping Balfour on track to hit targets for the year.
Overall, underlying group operating profit jumped 15 per cent to £156m, of which infrastructure investments chipped in £67m of profit, 43 per cent more than last year. Improving margins in the professional services division meant profits there rose 11 per cent to £42m even though revenues were flat. American funding for transport projects is coming through and volumes in the Middle East and the Australian mining industry are growing fast. That's making up for weakness over here.
True, £10m of one-off costs, mostly from new utility contracts, meant profits from support services declined 60 per cent from £25m to £10m. However, there's a big second-half weighting and margins should recover. Construction services also suffered, but this was hardly a surprise. The European rail sector is cutting back and there's less work around post Olympics. Profits from the division fell by a fifth, although cost-cutting should boost margins in the months ahead.
Broker Panmure Gordon expects full-year adjusted pre-tax profit of £340m and EPS of 37.7p (from £334m and 35.53p in 2011).
BALFOUR BEATTY (BBY) | ||||
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ORD PRICE: | 300p | MARKET VALUE: | £2.06bn | |
TOUCH: | 299-300p | 12-MONTH HIGH: | 312p | Low: 214p |
DIVIDEND YIELD: | 4.7% | PE RATIO: | 10 | |
NET ASSET VALUE: | 182p* | NET CASH: | £34m |
Half-year to 29 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2011 | 4.51 | 91.0 | 9.50 | 5.30 |
2012 | 4.83 | 93.0 | 12.2 | 5.60 |
% change | +7 | +2 | +28 | +6 |
Ex-div: 10 Oct Payment: 7 Dec *Includes intangible assets of £1.49bn, or 216p a share |