After two profit warnings, half-year figures from construction and services group Balfour Beatty (BBY) were never going to be pretty. Even after adding back one-off items, underlying profits were down 67 per cent at £52m. Much of this was attributed to a well-flagged deterioration on the construction side, where the previous first-half profit of £59m was turned into an operating loss of £41m. But there was also a surprise downturn in professional services, where profits fell 38 per cent to £26m, after a number of project cancellations in the Australian resources sector trimmed profits by £21m. However, disposal gains helped to maintain profits from infrastructure investments at £78m.
The group has moved to dispose of less profitable areas of the business, and is well advanced to exit from its mainland European rail operation. Moreover, since the half year-end it has also announced the sale of its UK facilities management business for a net £150m. The support services division - excluding the UK facilities management business - was boosted by a strong performance in the power sector, and profits there rose from £4m to £17m, while the order book grew 11 per cent to £4.2bn.
Broker Investec Securities is reviewing forecasts but currently expects full-year adjusted pre-tax profits of £206m and EPS of 22p (down from £300m and 33.6p in 2012).
| BALFOUR BEATTY (BBY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 244p | MARKET VALUE: | £1.68bn | |
| TOUCH: | 243-244p | 12-MONTH HIGH: | 321p | LOW: 206p |
| DIVIDEND YIELD: | 5.8% | PE RATIO: | 36 | |
| NET ASSET VALUE: | 173p* | NET DEBT: | 48% | |
| Half-year to 28 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 4.44 | 92.0 | 12.4 | 5.60 |
| 2013 | 4.32 | -6.0 | 1.2 | 5.60 |
| % change | -3 | - | -90 | - |
Ex-div: 9 Oct Payment: 6 Dec *Includes intangible assets of £1.3bn, or 190p a share | ||||
