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Balfour profits up 48%

Profits rose substantially for Balfour Beatty, up 48% to £201M compared to last year, on turnover of £7.488bn, up 36% on the last year, although write-offs from the failure of tube upgrade contractor Metronet were valued at £95M.

According to a joint statement from Balfour Beatty Chairman Sir David John, and Chief Executive Ian Tyler, "2007 was a very good year for the Group, both in terms of financial performance and progress made in pursuing our medium and long-term strategic objectives. Our cash position and our order book also improved significantly.

"We have record order books and an exceptionally strong pipeline of high-quality new work approaching contract. Our acquisitions will add substantially to our earning power. We are confident that we will continue to make further good progress in 2008 and beyond."

Much of Balfour's rise in revenue has come from new work from its US subsidiary (formerly Centex), with an order book approaching £600M in four major new schemes in the US.

Balfour's chief executive Ian Tyler said: "These four new projects, which will create new infrastructure for federal, municipal and private commercial customers, demonstrate the continuing strength of our US contracting businesses and the markets which they serve.

"These businesses have a very substantial pipeline of opportunities and I look forward to being able to announce further significant awards as the year progresses," he said.

The failure of tube upgrade contractor Metronet, which Balfour owned a 20% stake and is currently in PPP administration, failed to dent Balfour's business, although the write-off cost the company £95M.

"The 2007 uncertainties for our rail business arising from the entry into PPP administration of Metronet and the stated intention of Network Rail to reduce its supply base for rail renewals from six to four were resolved positively, with confirmation of our ongoing role on both the underground and overground networks," read the company's trading statement.

Shares in Balfours rose 4.25% on early trading to 448.25p per share.

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