Balfour Beatty on track for margin target
Balfour Beatty is on track to meet its target of achieving industry-standard margins in all its businesses, the company has declared.
The news came as the company provided a trading update for the second half of 2018, running up to 13 December.
Balfour's UK construction arm is expected to achieve margins in the range of 2-3% for the second half of 2018, it said in its update.
Achieving industry-standard margins is part of Balfour's goals under its Build to Last transformation programme.
As part of that, it has also been working to reduce its debt, announcing earlier this month that it has reduced its gross debt by 45% over the last 12 months, having paid off a £252.7m convertible bond.
Meanwhile, its forecast year end order book is around £12bn, up from £11.4bn at the end of 2017.
Balfour also confirmed that it expects completion of the full £745m Aberdeen Western Peripheral Route project this year, with its construction joint venture with Galliford Try in a "dialogue" with Transport Scotland on a commercial agreement in relation to associated claims.
The project was originally due to complete in spring 2017, then spring this year but was subsequently held up by the collapse of former joint venture partner Carillion's collapse in January.
Margins in Balfour's support services business also improved, within its 3-5% industry standard target range.
Leo Quinn, Balfour Beatty Group chief executive, said: "We are on track to deliver our Build to Last Phase Two goal of achieving industry standard margins in all earnings-based businesses in the second half of 2018.
"The actions we have taken since the start of 2015 have created a strong foundation for the future. We have consistently invested in our capabilities, systems and leadership while de-risking the business, strengthening the balance sheet and selectively building the order book.
"Going forward, we aim to drive market leading performance by using the disciplines we have instilled to translate Balfour Beatty's expert capabilities into long term profitable growth."
The Group's full year results will be published on 13 March 2019.