Balfour Beatty chairman Steve Marshall has said he expecs the £5bn private finance contract to widen the M25 would reach financial close “shortly”.
Balfour Beatty is a member of the Connect Plus consortium, which is preferred bidder for the upgrade.
In a trading udpate to shareholders at the company’s Annual General Meeting, Marshall added that trading performance in 2009 has been in line with expectations, underpinned by a high-quality order book, continued infrastructure expenditure by clients, acquisitions and tight control of costs.
Balfour Beatty’s cash position remains strong with average net cash in excess of £200M for the first four months of 2009.
Performance in the building sector has exceeded last year, with the UK steady and the US strong. In engineering, performance in the UK has been strong with good progress on road projects including the M74, A3, A421 and A46. In the United States, the firm has secured a five-year contract to support the delivery of National Grid’s US electricity transmission capital investment programme in New England. Performance in Hong Kong and Dubai has been in line with expectations.
In rail, lower UK volumes have hit performance at the start of the year, with Germany also down on last year. But the firm said good progress had been made in other parts of the business including Italy where it is working on the Bologna to Florence high-speed line and in Malaysia where it has won a £160M rail electrification and power supply project.
In investments, the firm anticipates reaching financial close in the first half of the year on at least three of the four PPP projects at preferred bidder stage. It has achieved financial close on the £170M Fife General Hospital at the beginning of May and announced today that we it has reached financial close on the £200M Southwark Schools for the Future programme.
It added that it expects to reach financial close on the M25 widening and maintenance programme shortly.
The firm’s order book at the half year is expected to be broadly in line with the £12.8bn reported for 31 December 2008.
“Our strong market positions, the resilience of our business model and our high-quality order book mean that we anticipate making progress in 2009,” said Marshall.