Dive Brief:
- Following up on promises of momentum during its half-year 2024 earnings call, London-based builder Balfour Beatty said it anticipates growth in its backlog and revenue in a Dec. 5 trading update.
- Balfour Beatty expects its order book, or backlog, to grow by over 5% in 2024 from the 16.5 billion pounds ($21 billion) it reported at the end of 2023. The company also projects revenue growth of about 2% from 2023’s 9.6 billion pounds.
- The company also said that profit from operations should be higher than its 2023 figure of 236 million pounds. It projects profits from its Construction Services division will be in line with 2023 results of 156 million pounds and said improved profits in its U.K. Construction segment would be offset by lower U.S. Construction profitability.
Dive Insight:
In the U.K., the company continues to work on two large projects — HS2, a high-speed rail line that will cut across the country, and Hinkley Point C, a nuclear power plant in Somerset, a county in the southwest of England. The installation, the first new nuclear power station to be built in the country in the last 30 years, was just fitted with its first reactor, according to the BBC.
The government’s commitment to invest in infrastructure to support economic growth is encouraging for Balfour Beatty in the medium term, according to the news release, with its growth areas of energy, transport and defense included in broad investment plans.
In the U.S., however, Balfour Beatty has run into issues. While it claimed its buildings business had robust performance, the costs of delays in the second half of the year on a handful of projects reduced the segment’s profitability, the update said. The company did not immediately respond to Construction Dive’s request for more information on the delayed projects.
Despite the hurdle, U.S. backlog is expected to grow by over 10% in 2024, up from 5.7 billion pounds in 2023, due to a strong second half of order intake for both its buildings and civils businesses. Its U.S. buildings segment booked:
- $600 million in the hospitality sector.
- $500 million of federal/state work.
- $400 million for commercial office jobs.
- $350 million for education contracts.
“In 2024, the Group has once again shown the benefit of the geographical and operational diversity of our portfolio, delivering an encouraging overall performance,” said Leo Quinn, Balfour Beatty’s CEO, in the news release. “As a result, we are on track to deliver earnings growth in 2024.”
