Following Liz Truss’ disastrous mini-Budget late last year, government finances were in such a state of disarray that the future earnings potential of construction companies such as Balfour Beatty (BBY), which depend so much on state contracts, looked in doubt. In its results for the last calendar year, however, the company gave investors some reasons to be hopeful.
First, it managed to widen its usually wafer-thin margin from its underlying earnings-based business from 2.3 per cent to 2.7 per cent. It’s an incremental increase, but helped produce a 42 per cent leap in underlying profit.