Leo Quinn

Publishing a trading update covering the period to 5 December 2024, the infrastructure group said its order book is expected to grow by over 5% in 2024 (2023: £16.5 billion) driven by momentum in the group’s chosen growth markets, principally UK energy and US buildings, with market dynamics allowing the group to be more selective in the work it undertakes.

As a result, 2024 revenue is expected to be c.2% ahead of the prior year (2023: £9.6bn) with underlying profit from operations (PFO) from earnings-based businesses also expected to be ahead (2023: £236 million).

Construction Services are expected to be in line with the prior year (2023: £156mn) as the improved PFO margin in UK Construction is now forecast to be offset by lower US Construction profitability, with the cost of delays at a small number of civils projects having increased in the second half.

In November, Balfour Beatty signed a two-year extension to its existing four-year term as sole contractor to both of the SCAPE Civil Engineering frameworks, which cover England, Wales and Northern Ireland, and the entirety of Scotland. The frameworks will now run until November 2028.

Balfour Beatty expects Support Services to continue to deliver margins at the top of its 6-8% target range, with revenue growth of c.15% (2023: £1,006m), while Infrastructure Investments gain on disposals expected to be modestly above previously guided £20 - £30m range with a number of ongoing transactions, with PFO excluding disposals remaining close to the £7 million loss reported for the first half.

As expected, the group’s power business continues to expand and has secured new orders of around £600m in the second half of the year, including the Bramford to Twinstead Reinforcement project for National Grid. Balfour Beatty has also recently been named as one of eight preferred partners for Scottish Power Energy Networks’ Strategic Agreement for Transmission Overhead Line Works, with up to £3bn of work being tendered.

Leo Quinn, Balfour Beatty group chief executive, said: “In 2024, the group has once again shown the benefit of the geographical and operational diversity of our portfolio, delivering an encouraging overall performance. As a result, we are on track to deliver earnings growth in 2024.

“We are pleased to confirm our fifth successive year of share buybacks in 2025, as our large order book, unique capabilities and balance sheet, provide a strong platform for continuing future shareholder returns.”

Balfour Beatty added that it is delivering £160m to shareholders in 2024 through share buybacks and dividends, while maintaining an appropriate balance between investment in the business and a strong capital position. This will take the group’s shareholder distributions to over £750m since the launch of its capital allocation framework in 2021.

The firm’s capital allocation framework remains unchanged, and from January 2025 the group intends to buy back further shares ahead of confirming the amount for its 2025 share buyback at the group’s full year results in March.