Full-year figures from Balfour Beatty (BBY) were never going to make pretty reading, with the final dividend canned and the troubled UK construction division suffering a further £118m writedown. However, with a new chief executive at the helm, and a 'Build to Last' business transformation programme gaining momentum, there are at last some encouraging signs. The share price rose nearly 7 per cent on these numbers.
The new self-help plan aims to save £200m in operating cash flow and £100m in costs within two years - albeit at an estimated upfront cost of £100m. Even so, analysts at Numis estimate that debt could be eliminated in the coming year, helped by the omission of the final dividend.
Total pre-tax losses from continuing operations increased from £49m to £304m. Set against this Balfour booked a profit of £242m from discontinued operations, most of it generated from the sale of Parsons Brinckerhoff for £234m.
Trading outside the troubled UK construction division was relatively subdued. Profits generated in the US, principally from work as a building contractor, were slightly higher, but margins remained wafer-thin at just 1 per cent. In support services, a 35 per cent increase in transportation revenue was offset by a decline in the power sector, leaving revenue just 1 per cent ahead at £1.27bn.
Numis is forecasting adjusted pre-tax profits of £72m and EPS of 8.6p for 2015 (from a loss of £80.5m and 11.5p loss per share in 2014).
| BALFOUR BEATTY (BBY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 246.6p | MARKET VALUE: | £1.7bn | |
| TOUCH: | 246.5-246.9p | 12-MONTH HIGH: | 310p | LOW: 146p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | NA | |
| NET ASSET VALUE: | 178p** | NET DEBT: | 18% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 | 7.49 | -35 | -7.5 | 14.1 |
| 2014 | 7.26 | -59 | -43.9 | 5.6* |
| % change | -3 | - | - | -60 |
Ex-div: na Payment: na *Interim dividend, final dividend omitted **Includes intangible assets of £1bn, or 151p a share | ||||
