Boban John
In the year to 31st December 2024, Balfour Beatty plc increased revenue by 4% to £10,015m (2023: £9,595m).
Underlying operating profit from earnings-based businesses was up 7% to £252m (2023: £236m). However, actual pre-tax profit was down 12% at £214m (2023: £244m).
UK construction contributed £3.0bn to group revenue during the year, with a further £3.6bn coming from US construction and £1.5bn coming from the Gammon, the Hong Kong joint venture with Jardine Matheson.
The UK construction business delivered an underlying operating margin of 2.7% (up from 2.3% in 2023) compared to 2.5% in Hong Kong and just 1.1% in the USA.
The decline in profitability of the US construction business was attributed to the cost of delays at a small number of civils projects.
Conversely, UK margins are on the up and expected to improve further both this year and next, putting the 3% operating margin target well within reach.
Balfour Beatty’s order book grew by 12% in 2024 to £18.4bn (2023: £16.5bn). While its UK construction order book grew only marginally, from £6.1bn to £6.2bn, its order book for power transmission and distribution work more than doubled.
The power transmission network is being upgraded and the demand for engineering and construction expertise outweighs supply, Balfour Beatty says.
During 2024 Balfour Beatty finished wiring all 116 T-Pylons and constructing a further 27 traditional lattice pylons on the Hinkley Point C Connection project for National Grid. The Viking Link interconnector, the longest interconnector in the world for which Balfour Beatty constructed the 65km UK onshore underground cable route, is now live and transmitting power between the UK and Denmark. Balfour Beatty also completed 62km of overhead line refurbishment between Bramford and Norwich, began to transition 3.5km of overhead lines in the North Wessex Downs to underground cables, handed back the first leg of the London Power Tunnels 2 project and energised the final circuit at the 400kV Littlebrook Substation.
Group chief executive Leo Quinn, who announced last week that he is to step down in September, 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.”
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