From any angle, Balfour Beatty’s (BBY) performance last year makes pretty grim reading. By the company’s own admission, challenging economic conditions, operational issues in UK construction and a significant downturn in the Australian natural-resources sector led to a disappointing financial performance.
And in an attempt to regain momentum, management has taken a surgical knife to the operating units, disposing of the UK facilities-management business for £155m and putting its rail operations in Spain and Scandinavia up for sale. Grouped together as discontinued operations, these racked up operating losses and related costs of £52m, resulting in group after-tax losses of £35m.
On a brighter note, the slimmed down operation is on track to achieve annual cost savings of £80m by 2015. The group's infrastructure investments also rose in value, with disposal gains up from £52m to £82m. But while there are signs of improvement in US and UK market conditions, the long-cycle nature of the business means those signs will take time to feed through to the bottom line. Analysts at Investec expect to downgrade their forecasts, but currently estimate normalised pre-tax profits for the coming year of £215m and EPS of 21p (from £187m and 20p in 2013).
| BALFOUR BEATTY (BBY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 299.3p | MARKET VALUE: | £2.06bn | |
| TOUCH: | 299-299.3p | 12-MONTH HIGH: | 322p | LOW: 207p |
| DIVIDEND YIELD: | 4.7% | PE RATIO: | 120 | |
| NET ASSET VALUE: | 150p* | NET DEBT: | 41% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 8.95 | 265 | 37.1 | 12.0 |
| 2010 | 9.24 | 201 | 23.0 | 12.8 |
| 2011 | 9.49 | 246 | 26.7 | 13.8 |
| 2012 | 8.66 | 147 | 17.9 | 14.1 |
| 2013 | 8.75 | 32 | 2.5 | 14.1 |
| % change | +1 | -72 | -86 | - |
Ex-div: 23 Apr Payment: 04 Jul *Includes intangible assets of £1.25bn or 182p a share | ||||
