Balfour Beatty profits jump as turnaround continues

From BBC - March 14, 2018

Britain's biggest construction firm, Balfour Beatty, has posted a big jump in annual profit as its turnaround continues.

The company behind Crossrail made a 117m pre-tax profit in 2017, up from just 10m the previous year.

The rise follows several years of big losses after Balfour's business became overly complex.

Chief executive Leo Quinn said it had only narrowly avoided the fate of rival Carillion by reforming its business.

Carillion, the construction outsourcing giant, fell into administration in January under under a debt pile of 1.5bn.

Mr Quinn told BBC Radio 4's Today programme: "We had our own near-death experience three years ago - eight profit warnings, 600m cash outflow in nine months from the company.

"These results today demonstrate an amazing transformation and turnaround."

In the year to 31 December, Balfour's underlying profits doubled to 196m, although revenue fell slightly to 6.9bn.

Neil Wilson, an analyst at ETX Capital, said the firm's profits were slightly below expectations but its higher margins were paying off.

"Margins are what matter and today's results continue the positive trajectory evident in the [firm's] December trading update."

Balfour, which is working on the Thames Tideway Tunnel and HS2, ran into trouble in 2014 after more than a decade of acquisition-led growth.

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