By Balfour Beatty released its AGM trading update, with the group expecting full-year contributions to profit from its operating businesses to be broadly in line with 2022 levels.
In the first quarter, the group won several contracts but the order book declined from £17.4bn to £17bn.
The average monthly net cash balance was £740m in the first quarter, compared to £815m seen at the end of 2022.
The group expects to complete £150m worth of share buybacks this year, with £75m already completed as at 12th May.
The shares fell 1.7% following the announcement.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, comments:
“Balfour Beatty looks like it’s back on solid ground.
The infrastructure giant’s trading broadly in line with 2022 levels, and continues to win contracts in both the UK and US.
The order book fell 2.3% in the first quarter but because a lot of its contracts are long-term, the group’s revenue visibility looks good for now.
With the UK government renewing its commitment to infrastructure investment at the back end of last year should provide demand for large construction groups like Balfour for years to come.
But even in the good times, margins in the construction sector are pitifully thin.
Last year we saw the operating margin creep back up towards 2.5%, but such low margins leave little room for error if problems arise.
Investors should also remember that Balfour’s fortunes will continue to wax and wane with the wider economy.”
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