However, an increased provision for building safety remediation has impacted overall profitability.

The company’s UK construction division demonstrated resilience, achieving an improved operating margin of 2.7%, up from 2.3% in 2023. This growth aligns with Balfour Beatty’s long-term goal of reaching a 3% margin. The improvement was driven by disciplined project execution and a focus on high-quality contracts.

Group-wide, underlying operating profit from earnings-based businesses increased by 7% to £252 million, despite a 12% drop in pre-tax profit to £214m due to various one-off charges. Revenue remained stable at just over £10 billion, with UK construction contributing £3.0bn. The firm’s order book expanded by 12% to £18.4bn, signaling strong demand in the UK energy, transport, and defence sectors.

A significant factor affecting Balfour Beatty’s bottom line was an £83m provision related to the Building Safety Act. The charge reflects a reassessment of potential liabilities stemming from regulatory changes, though the company anticipates spreading the cash impact over several years. The provision does not account for potential recoveries from third parties, leaving room for future financial adjustments.

Beyond its core construction business, Balfour Beatty is experiencing substantial growth in the power transmission and distribution sector. The order book for this division more than doubled in 2024, reflecting increasing demand for infrastructure upgrades. Notable projects include the Hinkley Point C Connection, the Viking Link interconnector, and major UK-wide electricity transmission upgrades.

The company also secured key contracts such as the £363m Bramford to Twinstead reinforcement scheme and participation in the Eastern Green Link 2 project. These contracts, coupled with long-term framework positions in strategic infrastructure initiatives, provide confidence in sustained future growth.

Despite economic headwinds, Balfour Beatty remains optimistic about its future, emphasising profitability over volume expansion. CEO Leo Quinn, who will step down in September after a decade at the helm, highlighted the company’s ability to generate shareholder value, evidenced by increased dividends and a £125m share buyback program for 2025.

Leo Quinn, Balfour Beatty group chief executive, said: “The group made further strong progress in 2024. We once again delivered managed profitable growth from our earnings-based businesses and healthy cash generation, while also increasing our high-quality order book.

“The board continues to have confidence in Balfour Beatty’s ongoing ability to deliver sustainable cash generation for significant shareholder returns, as evidenced by our announcement of increased dividends and share buybacks for 2025. Balfour Beatty is well positioned to continue its disciplined performance in the medium term, with strong order book visibility, attractive opportunities in our growth markets of UK energy, transport and defence, and US buildings, and our expert, highly engaged workforce positioning the group for ongoing success.”