FTSE 250 infrastructure group Balfour Beatty plc (LSE:BBY) saw its shares jump 9% to 945p after raising its full-year profit guidance on the back of a strong first-half performance.
The company now expects low double-digit percentage growth in profit from operations at its earnings-based businesses, upgraded from previous guidance of high single-digit growth.
The catalyst for the upgrade was a dramatic turnaround in the group’s US construction division, which had been a persistent drag on overall performance.
The American arm delivered £22 million of underlying profit in the six months to June, swinging sharply from an £11 million loss recorded in the same period a year earlier.
That recovery was driven by growth in the buildings business, which serves data centre and commercial customers, alongside reduced losses in the civils division covering roads and bridges.
Support services, which includes power transmission work for the UK grid, also performed strongly, lifting underlying profit to £66 million from £46 million in the prior year.
Group underlying profit from operations rose to £119 million from £77 million, on revenue of £5.56 billion compared with £5.15 billion a year ago.
Underlying earnings per share increased to 21.7p from 14.4p, reflecting the broad-based improvement across the business.
The interim dividend was raised 12% to 4.7p, and the company completed £102 million of share buybacks during the period.
Balfour also lifted its average net cash guidance by £200 million to a range of £1.5 billion to £1.7 billion, and raised expected net finance income to between £35 million and £40 million, from a prior range of £28 million to £32 million.
UK construction was the softer performer, with margin slipping to 3.4% from 3.6%, though the prior-year figure included a £10 million one-off credit.
The group’s order book stood at £22.9 billion, up from £22.7 billion at the December year-end and well ahead of the £19.5 billion recorded a year ago.
Philip Hoare, chief executive, said the group entered the second half with momentum and pointed to demand from customers investing in infrastructure.
Losses at the infrastructure investments division narrowed to £9 million from £10 million, helped by the end of monitor and legal costs.
Peel Hunt reiterated its ‘buy’ rating on Balfour with a 960p price target, noting the shares trade at 14.2 times the earnings the broker expects the company to make in 2027, which it considers cheap.
