Balfour Beatty - Post half-year profit 69 percent higher

Wednesday, 15th August 2018 10:29 - by Rajan Dhall

On the face of it, this report seems pretty mixed, obviously its good that the profit has jumped 69%, but the Co. have also disclosed a GBP 15mln charge. The Co. has also raised the dividend by 33% which is also signs that the company is doing better. Below are some of the highlights from the report:

·           Underlying profit from operations (PFO) increased by 69% to £66 million (2017: £39m)

·           Average net cash £161 million (2017: £45m); half-year net cash £366 million (2017: £161m)

·           Underlying UK Construction PFO £5 million (2017: £2m), after £15 million charge on Aberdeen Western Peripheral Route 

·           Higher quality order book increased 11% to £12.6 billion (2017: £11.4bn), whilst maintaining Build to Last disciplines

·           Directors' valuation of Investments portfolio stable at £1.2 billion, post £108 million of sale proceeds    

·           Interim dividend payment up 33% to 1.6 pence per share (2017: 1.2 pence)

Leo Quinn, Group Chief Executive, said, "All our businesses are now either achieving industry standard margins or on track to do so in the second half. The disciplines installed under Build to Last are also enabling us to increase the order book with key infrastructure projects to translate Balfour Beatty's expert capabilities into future profitable growth.

"Given the strength of our balance sheet and the Board's confidence that the Group's full year earnings will meet expectations, we are raising the interim dividend by 33% and plan to repay the outstanding convertible bonds this year."

The weekly chart still looks to have a bullish trend and with a decent result and forward book there doesn't seem to be a reason why we could not challenge the next resistance level at 300p. beyond that 318p looks a stretch today but in the future, if results remain positive we could see a break.

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.