Balfour Beatty said today that its high quality order book - boosted by recent contract wins - will enable the contractor to “make progress” in the remainder of the year.
In a trading update for the half year ended 27 June in advance of its half-year results announcement on 12 August the firm said trading continued to be in line with expectations, underpinned by continued infrastructure expenditure by customers, acquisitions and tight cost controls.
“We continue to have a high-quality order book, which, at the half year, is expected to be broadly in line with the £12.8bn reported for 31 December 2008,” it said. “Our cash position remains strong with average net cash in excess of £200M for the first six months of 2009.”
Performance in the building sector has exceeded that of last year despite the downturn, with the UK steady and the US strong. In spite of a more competitive environment for securing new work, there have been good performances from Balfour Beatty Construction US and Heery with major new contracts in North Carolina, Texas and California. The integration of RT Dooley, a family-owned construction firm based in North Carolina acquired in February 2009 for $40M (£20M) is on track.
In the engineering sector, performance in UK civil engineering has been strong, it said. “We have made good progress on road projects including the M74, A3, A421 and A46. Following financial close, work started in May on the construction contract to add 40 lane miles of additional capacity to the M25.
“In the US, we secured the five-year contract to support the delivery of National Grid’s US electricity transmission capital investment programme in New England. Performance in Dubai and Hong Kong has been in line with expectations. Earlier this week, Gammon Construction announced it had been awarded a contract in excess of £120M for the redevelopment of the Hennessy Centre in the Causeway Bay district of Hong Kong.”
In rail, the firm said reduced volumes in some parts of the UK market have impacted the start of the year, with Germany also down on last year. “We recently secured a two-year, £130M extension to our track renewal alliance contract with London Underground and an £80M extension to a track renewal contract with Network Rail.
“Good progress has been made in other parts of the business including in Italy on the Bologna to Florence high-speed line and in Malaysia with the signing of a rail electrification and power supply project.
In the investments sector, the firm has reached financial close in the first half of the year on three of the four PPP projects at preferred bidder stage, including the £170M Fife General Hospital and the £200M Southwark Schools for the Future programme. As part of the Connect Plus consortium, Balfour Beatty has also reached financial close for the £6.2bn design, build, finance and operate (DBFO) contract to provide additional capacity and to maintain the M25 motorway. The firm added it expects to reach financial close on the Carlisle Northern Development Route project shortly.