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Balfour hints at future consultancy purchase

Cash rich Balfour Beatty said this week that it was looking to snap up a consultant to boost its intellectual capability in transport and infrastructure.
Chief executive Ian Tyler told NCE that the company's acquisition of Birse, which formally ceased to exist on Monday when its shares were de-listed from the stock exchange, was just one aspect of some 'very specific strategies' which may result in further acquisition.Interim results for the six months to 1 July 2006 published last week showed the company sitting on a war-chest of £353M in net cash. Around £32M of this was spent last month in acquiring Birse as part of one strategy to expand regionally.Tyler told NCE that more cash could be spent buying a consultant with highways and infrastructure skills.'If you look at our major customers, almost all of them are looking for us to do more and more thinking,' he said, citing the Highways Agency, National Grid and BAA as clients who look for strong contractor input.'We are no longer simply going out and constructing the project or indeed managing the designer. We need to invest in our intellectual capability,' he said.Tyler cautioned that any acquisition would be carefully matched. 'We are not looking to become a consulting engineer and so are not looking to acquire a general civil engineering consultant. It would be targeted.' Tyler added that other strategies included funding investment in PFI outside the UK and in non-PFI assets in the UK such as regional airports or utilities such as water and gas.'We are not bankers and not looking to compete head on with Goldman Sachs. But where we believe we can use our core competencies we will look to invest,' said Tyler.The interim results also showed profit before taxation and exceptional items for the six months to 1 July 2006 up to £60M from £52M last year.There was a net exceptional charge after tax of £21M, largely due to the write-off of goodwill in its US civils business and partly offset by a gain arising from the reduction in its Hatfield fine.mark.hansford@emap.com

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