In a trading update covering the period to 7 December, the firm said its 2023 revenue is expected to be about 5% ahead of the prior year (FY2022: £8.9 billion),

Underlying profit from operations from earnings-based businesses is expected to be broadly in line with the prior year (FY2022: £232 million).

The group’s order book, expected to be marginally higher than the £16.4bn reported at half year, was unaffected by the UK Government’s decision to cancel HS2 Phase 2, which had yet to be contracted. The HS2 works at Area North and Old Oak Common continue to progress well, it said.

In Support Services, the group has had further success in its local roads business, signing a six-year extension worth £330m to the highways maintenance contract with Lincolnshire County Council. In October, the rail business was awarded a £43m contract to deliver essential upgrade works on the London Underground’s Piccadilly line. In August, the Group’s power transmission and distribution team was selected as one of ten preferred bidders on SSEN Transmission’s c. £10bn Accelerated Strategic Transmission Investment (ASTI) framework.

From 2024, Balfour Beatty is expecting orders in the power business to expand, as the industry positions itself to deliver the infrastructure upgrades required to facilitate the UK Government’s Net Zero ambitions.

In Infrastructure Investments, Balfour Beatty has disposed of two assets, both in the second half year of the year, for a combined gain on disposal of £26m, in line with prior expectations for 2023 gains on disposal of £15m - £30m. The proceeds from each sale are in excess of the Balfour Beatty Directors’ valuation as of 30 June 2023, with total consideration of £60m. 2023 investment in new and existing projects is expected to be around £45m.

Balfour Beatty said it continues to deliver attractive total cash returns to shareholders while maintaining an appropriate balance between investment in the business, and a strong capital position. Once the 2023 share buyback programme completes this month, £595m will have been distributed to shareholders through share buybacks and dividends since the start of 2021. From January, the group intends to buy back further shares ahead of confirming the amount for its 2024 share buyback at the group’s full year results in March.

Leo Quinn, Balfour Beatty group chief executive, said: “Balfour Beatty’s solid performance has continued in the second half of the year and the Board remains confident that the Group will achieve our expectations for the full year.

“We are pleased to confirm our fourth successive year of share buybacks in 2024, as our large order book, unique capabilities and balance sheet, provide a strong platform for continuing future shareholder returns.”