Balfour: UK market beats expectations

Balfour Beatty’s UK construction revenues have been ahead of expectations since the start of the year, following the poaching of a number of former Rok contracts.

The construction giant said in its first quarter interim management statement today that its £15.2bn order book had “advanced” since its last statement in March, although it did not give a precise figure.

The statement came as the firm announced it had won two contracts each worth £100m to performance highways maintenance in Coventry and Warwickshire, and street lighting services in Cambridgeshire.

Its statement said the UK construction business had also benefitted from Crossrail wins, referring to the £235m job won in consortium with Morgan Sindall, Vinci and Alpine BeMo to build tunnels around Liverpool Street and Whitechapel stations. It said: “The construction order intake in the first quarter was ahead of our expectations. This is primarily due to contracts won by our regional UK building business, including novated Rok contracts, and the confirmation of the award of a Crossrail contract for our civil engineering business.”

Performance in the US was ahead of expectations, but is still unlikely to repeat the profit margins generated last year. It added that the Dubai market remained quiet, and that its professional services division had seen some negative impact from the Queensland floods in Australia.

It added: “We have put in place a clear strategy, and the group is well-placed to benefit from the growth in this market based on our depth of infrastructure knowledge, breadth of capability and the strength of our balance sheet.

“While we do not expect, in the short term, a meaningful recovery in the UK and US infrastructure markets, we continue to expect to make progress this year.”