Infrastructure builder Balfour Beatty more than doubled annual earnings, and lifted its share buyback target as cash flow improved and despite a loss at its UK construction unit.
The company on Thursday reported underlying profit from operations of £181m compared with £75m in Covid-affected 2020 and 5% ahead of pre-pandemic levels. It said it was now buying back £150m in shares and lifted its dividend to 9p a share from 1.5p a year earlier.
Underlying profit from operations for the year at soared to £197m compared with £51m as the economy recovered from the pandemic.
The construction services division delivered underlying profit of £79m, up from £29m, driven by a continued strong performance from its Gammon unit. US Construction almost doubled its profit to £51m as it returned to pre-pandemic levels.
UK construction posted a narrower £2m loss from a £26m in 2020, following write-downs on private sector property projects in central London. It returned to profitability in the second half of the year.
Balfour said it expected its construction services and support services to deliver further profit growth this year and would continue to divest assets and make new investments at its infrastructure investments business.
“For 2023 and beyond, the strength of the group’s order book and positive infrastructure markets create the visibility to deliver profitable managed growth and sustainable cash generation. With a transformed portfolio, the Group is confident of delivering significant future shareholder returns,” the company said.
Balfour has a £16.1bn order book “providing a measure of inflation protection through improved contract terms”. It said the risk profile continued to decrease at UK Construction, where at year end only 14% of the order book is from fixed price contracts, compared with 20% in 2020.