A diverse revenue stream is clearly serving Balfour Beatty well as the infrastructure group reported a 34 per cent increase in first half adjusted operating profits to £151m and a £500m rise in the forward order book to £14.6bn.
Balfour Beatty operates in civil engineering, design and management services as well as investing in a number of privately funded infrastructure projects. Around half of group revenue is generated outside the UK, notably in the professional services division. This was transformed following the acquisition of US services group Parsons Brinckerhoff which contributed £710m of the division's £829m turnover and £35m to operating profits of £49m.
The group's construction services arm inevitably faced pressures associated with a cut back in government spending. While turnover fell 13 per cent to £3.28bn, continued tight control on costs helped to boost profits by 17 per cent to £83m. Most of the revenue decline was seen in the US, but the UK also suffered due to softness in the regional building business and the completion of some large hospital projects.
Panmure Gordon is forecasting full-year adjusted EPS of 34.8p, rising to 38.3p in 2011 (2009: 34.6p).
| BALFOUR BEATTY (BBY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 265p | MARKET VALUE: | £1.8bn | |
| TOUCH: | 264-265p | 12-MONTH HIGH: | 329p | LOW: 228p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 145p* | NET CASH: | £500m | |
| Half-year to 26 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 4.39 | 65.0 | 9.4 | 4.79 |
| 2010 | 4.61 | 81.0 | 9.2 | 5.05 |
| % change | +5 | +25 | -2 | +5 |
Ex-div: 6 Oct Payment: 3 Dec *Includes intangible assets of £1.46bn, or 213p a share | ||||
