The good news from Balfour Beatty (BBY) is that 90 per cent of the legacy issues that have contributed to a string of profit warnings over the past few years will be out of the way in 2016. Inside the troubled UK construction division, over 60 per cent of the 89 lossmaking legacy contracts were completed by the December 2015 year-end, and the underlying loss from the construction business was cut from £229m to £187m.
Underlying revenue in UK construction was down by 14 per cent at £2bn, but this was mainly because managers are now being more selective about the work taken on, preferring to maintain margins at the expense of volume. And the group's overall transformation is starting to take shape; so much so that, having omitted all dividend payments in 2015, the group now expects to pay an interim payment in August.
Trading outside the UK saw revenue growth of 3 per cent in the US, while the order book there grew by 11 per cent. However, a stronger second half was not enough to erase first-half losses and the loss from operations totalled £22m.
Analysts at Numis are forecasting adjusted pre-tax profits for the year to December 2016 of £100m and EPS of 12.5p, against a loss of £123m and negative earnings of 19.6p in 2015.
| BALFOUR BEATTY (BBY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 253.2p | MARKET VALUE: | £1.7bn | |
| TOUCH: | 253-253.5p | 12-MONTH HIGH: | 275p | LOW: 206p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 120p** | NET DEBT: | 24% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 | -304 | -43.9 | 5.6* |
| 2015 | 6.96 | -199 | -30.2 | nil |
| % change | -4 | - | - | - |
Ex-div: na Payment: na *Interim dividend, final dividend omitted **Includes intangible assets of £1.07bn, or 155p a share | ||||
