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Annual Report andAccounts 2025
Building
NewFutures
INSIDE THIS REPORTABOUT US
Balfour Beatty is a leading
international infrastructure group
with 26,0 0 0 employees driving
the delivery of powerful new
solutions, shaping thinking,
creating skylines and inspiring
a new generation of talent to be
the change-makers of tomorrow.
We finance, develop, build,
maintain and operate the
increasingly complex and
critical infrastructure that
supports national economies
and deliver projects at the
heart of local communities.
Discover more online at balfourbeatty.com
MARKET REVIEW
Well positioned infour
growth markets
Capitalising on high-growth
markets where the Group has
the capabilities and a proven
track record to secure
newopportunities.
OUR 2025 HIGHLIGHTS
From project milestones, contract
wins and digital advances to
record order book growth, take a
look at Balfour Beatty’s highlights
and achievements from 2025.
DIGITAL
Reimagining construction
through digital innovation
Balfour Beatty is positioned to
lead the industry in digital and
future-ready ways of working.
Front cover image: Denzel Chisango, Apprentice Site Engineer on the M3 Junction 9 Improvement Scheme
in Winchester. Balfour Beatty is working in a joint venture for National Highways to deliver major road widening
and improvements works to increase capacity and reduce congestion.
Read more on page 2. Read more on page 15. Read more on page 20.
FINANCIAL PERFORMANCECONTENTS
STRATEGIC REPORT
1 Financial performance
4 Balfour Beatty at a glance
6 Group Chair’s introduction
8 Our business model
9 Our strategy: Build to Last
10 Group Chief Executive’s review
15 Market review
20 Digital
21 Stakeholder value
24 Operational review
33 Directors’ valuation of the
Investmentsportfolio
35 Health, safety and wellbeing
40 Ethics and compliance
41 Tax strategy
42 Sustainability
56 Our people
61 My Contribution (MyC)
62 Non-financial and sustainability
information statement
63 Measuring our financial performance
69 Chief Financial Officer’s review
72 Risk management
90 Viability statement
91 Climate change and Task Force
onClimate-related Financial
Disclosures(TCFD)
GOVERNANCE
99 Board leadership andCompanypurpose
107 Stakeholder engagement
111 Division of responsibilities
114 Composition, succession andevaluation
117 Nomination Committee
121 Safety and Sustainability Committee
124 Audit and Risk Committee
130 Remuneration Committee
161 Directors’ report
FINANCIAL STATEMENTS
165 Independent auditor’s report to the
members of Balfour Beatty plc
174 Financial statements
184 Notes to the financial statements
OTHER INFORMATION
260 Unaudited Group five-year summary
261 Shareholder information
Balfour Beatty plc | Annual Report and Accounts 2025
1
Strategic report Governance Financial statements Other information
REVENUE¹ £m
8,931
9,595
10,015
10,767
8,280
24 25
24 25
24 25
24 25
24 25
24 25
24 25
24 25
24 25 24 2521
21
21
21
21
21
21
21
21 2122
22
22
22
22
22
22
22
22 2223
23
23
23
23
23
23
23
23 23
UNDERLYING PROFIT FROM
OPERATIONS (PFO) £m
197
279
228
248
252
UNDERLYING EARNINGS
PERSHARE (BASIC) Pence
37.3
43.6
47.6
29.7
47.5
ORDER BOOK¹
£bn
16.5
18.4
22.7
16.1
17. 4
NET CASH
£m
842
943
1,446
790
815
STATUTORY NET CASH/
(BORROWINGS) £m
435
446
837
418
441
STATUTORY REVENUE
£m
7,185
7,629
7,9 9 3
8,234
9,489
STATUTORY PROFIT
FORTHEYEAR £m
194
178
264
139
287
STATUTORY EARNINGS
PERSHARE (BASIC) Pence
35.3
34.2
52.6
21.3
46.9
DIVIDENDS PER SHARE
Pence
9.0
10.5
11.5
12.5
14.0
KEY
Alternative performance measures
Statutory measures
1 Including share of joint
venturesandassociates,
beforenon-underlyingitems.
The Group has presented financial performance measures which are considered most relevant
to the Group and used to manage the Group’s performance. An explanation of these measures
and appropriate reconciliations to statutory measures are provided on pages 63 to 68.
BUILDING NEW FUTURES
2025 highlights
and achievements
400
new apprentices and graduates joined
ourEarly Careers Festival #ECFest
US$746m
secured contract for
Interstate 35 in Austin, Texas
INVESTING IN INNOVATION
£ 7.2m
transforming how Britain builds
with a £7.2 million AI investment
Find out more about our Copilot
investment on page 20.
BALFOUR BEATTY VINCI REOPENED
M6 EARLY AFTER HS2 VIADUCT SLIDE
9.5hrs
ahead of the schedule
Scan or click to watch
the event highlights.
Scan or click to
find out more.
Scan or click to find out more.
INDUSTRY-LEADING EMPLOYEE
ENGAGEMENT SCORE
83%
8% above our industry benchmark
Read more on page 56.
Balfour Beatty plc | Annual Report and Accounts 2025
2
Strategic report Governance Financial statements Other information
Scan or click to watch
the event highlights.
70
US colleagues joined
My Contribution’s
AIhackathon
BALFOUR BEATTY COMMUNITIES
EXPANDED MULTIFAMILY PORTFOLIO WITH
ACQUISITION OF RIVER POINTE IN TEXAS
300
units
Read more on page 31.
Read more on page 53.
GAMMON CELEBRATED THE COMPLETION OF
TWO QUEENSWAY BRIDGE PROJECT
96
REDUCING RAIL FLEET’S CARBON
EMISSIONS USING PIONEERING
HYDROGEN-BASED ENGINE CLEANING
SELECTED BY ROLLS-ROYCE AS ITS
FISSILE CONSTRUCTION PARTNER
Scan or click to
find out more.
Read more on page 17.
metre-long
pedestrian bridge
Scan or click to
find out more.
£833m
Net Zero Teesside
contractsecured
Scan or click to
find out more.
£1.012bn
Ⓐ
social value generated in the UK
Balfour Beatty plc | Annual Report and Accounts 2025
3
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BALFOUR BEATTY AT A GLANCE
International
infrastructure
experts
OUR CULTURAL FRAMEWORK
Balfour Beatty’s Cultural Framework provides a simple and clear view ofour purpose, values
andbehaviours under our Build to Last strategy. The framework reflects who we are now as
aninternational group, who we want to be, what we value and what drives the way we work.
OUR PURPOSE
Building New Futures
We are leading the transformation of our industry to meet the challenges of the future.
OUR STRATEGY
Build to Last
This is our strategy for continuous improvement.
OUR VALUES
Our values reflect the norms and beliefs that drive the way weworkand how we measure
ourselves.
OUR BEHAVIOURS
Our behaviours reflect the things we will do to consistently delivertothe standard set out
in our values.
OUR CODE OFETHICS
Our Code of Ethics is the foundation of everything we do. Itprovides a clear direction on
the standards, values and expectations that guide the behaviours of ouremployees and
supply chain partners.
Find out more about our strategy and values on page 9.
GROUP HIGHLIGHTS
REVENUE
1
£10,767m
UNDERLYING PROFIT BEFORE TAX
£291m
NUMBER OF EMPLOYEES
26,000
DIRECTORS’ VALUATION
INVESTMENTSPORTFOLIO
£1.1bn
1 Including share of joint ventures and associates.
Scan or click to find
out more about our
Cultural Framework.
United Kingdom
£12.9bn
Hong Kong
£2.0bn
United States
£7.8bn
GROUP ORDER BOOK
1
£22.7bn
LEAN EXPERT TRUSTED
SAFE SUSTAINABLE
TALK
POSITIVELY
COLLABORATE
RELENTLESSLY
ENCOURAGE
CONSTANTLY
MAKE A
DIFFERENCE
VALUE
EVERYONE
Balfour Beatty plc | Annual Report and Accounts 2025
4
Strategic report Governance Financial statements Other information
CONSTRUCTION SERVICES
Specialises in the design and
construction of major infrastructure
andbuilding projects in the UK, US
andHong Kong.
SUPPORT SERVICES
Maintains, upgrades and manages vital
services across the power transmission,
distribution, utilities, road and rail sectors.
INFRASTRUCTURE
INVESTMENTS
Operates and maintains infrastructure
projects and a portfolio of military and
multifamily housing and student
accommodation assets.
Hong Kong International Airport for the
Airport Authority Hong Kong.
Central Rail Systems Alliance – Hanslope Junction
renewal, UK.
River Pointe in Conroe, multifamily housing,
Texas,US.
OUR DIVISIONS
SELECTIVE BIDDING
FORCONTRACTS
Our stringent gated lifecycle process
allowsus to carefully control our project
portfolio onan ongoing basis.
FINANCIAL
PERFORMANCE
£18.7bn
Order book
1
£4bn
Order book
1
£1.1bn
Directors’ valuation
£ 8,711m
Revenue
1
£171m
Underlying profit fromoperations
£182m
Statutory profit fromoperations
£629m
Revenue
1
£16m
Underlying profit before tax
£14m
Statutory profit before tax
£1,427m
Revenue
1
£122m
Underlying profit fromoperations
£145m
Statutory profit fromoperations
Find out more in our Operational review on
pages 24 to 28.
Find out more in our Operational review on
pages 29 and 30.
Find out more in our Operational review on
pages 31 and 32.
Find out more in our Business model section on page 8.
1 Including share of joint venture and associates.
Balfour Beatty plc | Annual Report and Accounts 2025
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Strategic report Governance Financial statements Other information
GROUP CHAIR’S INTRODUCTION
“ 2025 has been a defining
year for Balfour Beatty.”
Charles Allen
Lord Allen of Kensington, CBE,
Non‑executive Group Chair
Discipline.
Momentum.
Purpose.
Dear Shareholders,
2025 has been a defining year for Balfour Beatty.
The Board has overseen disciplined delivery,
ensured a robust and well governed executive
succession transition and continued to strengthen
the culture that underpins our long-term
performance and value creation for
allstakeholders.
Our order book is of high quality, our balance
sheet remains strong, and our customer
relationships continue to deepen. These are not
short-term achievements. They reflect more than
a decade of cultural transformation and operational
discipline, providing confidence in our future in a
world that demands consistency, resilience and
long-term thinking.
Planned leadership transition
This was also a year of important leadership change.
On behalf of the Board, I pay warm tribute to
both Leo Quinn, former Group Chief Executive
and Phil Harrison, Chief Financial Officer,
foradecade of transformative leadership.
Leostrengthened our foundations, simplified
thebusiness, and raised the bar across our
industry for safety, execution and performance.
We thank him for his vision, his courage, and his
unwavering commitment to building a stronger,
more focused and higher performing company.
Ithank Phil for his exceptional leadership and
contribution over the last 10 years which has
been instrumental in building Balfour Beatty’s
financial strength and resilience, creating
substantial value for shareholders, and positioning
the Group extremely well for the future.
As part of the Board’s long-term succession
planning, in September, we were pleased to
welcome Philip Hoare as Group Chief Executive.
Philip brings deep sector expertise, a people
centred approach, and a sharp focus on customers
and delivery. He has made a confident and proactive
start, engaging with teams across the Group,
listening to customers and partners, and reinforcing
the culture and purpose that define Balfour Beatty.
His leadership blends continuity where it matters
with fresh perspective where it counts, and the
Board is confident he will build on our strong
foundations and further strengthen and evolve
the business.
Balfour Beatty plc | Annual Report and Accounts 2025
6
Strategic report Governance Financial statements Other information
In February, we announced that Myles Westcott
will succeed Phil Harrison as Chief Financial
Officer following an extensive search process.
Myles will join later this year and brings more
than 30 years of finance leadership experience,
including almost 25 years at BAE Systems plc,
amultinational defence and security corporation.
Once Myles joins the Group, Phil Harrison will
remain in an advisory capacity for four months
toensure a smooth transition.
Board changes
At the 2025 AGM, Rudy Wynter, who has over
35 years’ of experience in the gas and electricity
industry was formally appointed by shareholders
as an Independent Non-executive Director,
bringing significant experience in regulated
infrastructure, operational leadership and
safety-critical environments.
Zero Harm remains non-negotiable
Our culture remains the foundation of our
performance, and above all, Zero Harm is
non-negotiable. The tragic incident last May
onaUS Buildings Federal project in Baltimore,
where a colleague working for a subcontractor
lost their life while assisting a lifting operation,
was a stark and sobering reminder of the risks
inherent in our industry. As a Group we examined
the circumstances of this tragic incident with
great care and the Board continues to oversee
the strengthened controls and cultural
reinforcement that has followed.
Everyone has the right to return home safe,
every day. We remain unwavering in ensuring
that this principle guides every decision we make.
Shaping a sustainable business
At Balfour Beatty, we build assets that communities
rely on for generations. That long-term responsibility
shapes our approach to sustainability – from
reducing carbon and enhancing biodiversity,
topromoting social mobility through skills,
apprenticeships and internships. It also drives our
commitment to responsible innovation, including
digital tools and AI, which we use to enhance
productivity, quality and assurance across our
projects and supply chain.
This year has seen continued investment in our
early careers talent with 7.4% of our UK workforce
now in ‘earn and learn’ roles. This commitment is
mirrored across our US and Gammon operations,
where we continue to grow and strengthen
ourearly careers communities to build
long-termcapability.
In July we announced a £7.2 million investment
in Microsoft 365 Copilot to support responsible
innovation and productivity. Early progress and
adoption across the business has been strong,
with our approach recognised by Microsoft as an
example of leading enterprise AI adoption in
oursector.
Forcustomers, communities
andshareholders.
2026 marks Balfour Beatty’s sixth consecutive
year of share buybacks under our capital allocation
framework. Our record order book, differentiated
capabilities, and strong financial position give the
Board confidence in our ability to continue
delivering attractive returns to shareholders,
while maintaining appropriate investment in the
business and a robust capital base. In 2025, we
returned £189 million to shareholders through
buybacks and dividends, taking total distributions
since 2021 to £945 million. This confidence is
reflected in the c.£200 million share buyback
programme announced for 2026 and the Board’s
recommendation of a final dividend of 9.8 pence
per share, bringing the total 2025 dividend for the
year to 14 pence per share.
SECTION 172 STATEMENT
The Directors have had regard to their
duties under Section 172 of the
Companies Act 2006 throughout the
year. The Board considers the long-term
consequences of its decisions and the
interests of the Group’s key stakeholders,
in promoting the long-term success of
the Company. The Board reviews
stakeholder engagement mechanisms
regularly and ensures that stakeholder
perspectives are understood and taken
into account in Board discussions and
decision-making.
Further details of stakeholder engagement,
sustainability matters, risk management
and the Board’s governance and
decision-making framework are set out
on pages 107 to 110, 42 to 55, 72 to 89
and 111 to 113 of this Annual Report.
Conclusion
I am proud of the progress we have made and
confident in the road ahead. My thanks go to
ourpeople for their skill and dedication; to our
customers and partners for their trust; and to
ourshareholders for their continued support.
Together, we will build on firm foundations,
shape new horizons and deliver lasting value.
Charles Allen
Lord Allen of Kensington, CBE
Non‑executive Group Chair
10 March 2026
US: Charles pictured on a site visit to a mixed-use commercial
development in Texas, US with members of the Board, Phil
Harrison, Barbara Moorhouse, Philip Hoare, Group Chief
Executive, and Gabby Costigan MBE.
Hong Kong: (from left to right) Charles with Kevin O’Brien,
Gammon’s Chief Executive and Philip Hoare, Group Chief Executive,
at Gammon’s Leadership Connect event in Hong Kong.
UK: Charles during a visit to Balfour Beatty Living Places’
Buckinghamshire Highways depot in Aylesbury, meeting with
teams delivering essential services for local communities.
Balfour Beatty plc | Annual Report and Accounts 2025
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Strategic report Governance Financial statements Other information
OUR BUSINESS MODEL
HOW WE WORKAt Balfour Beatty, we finance,
develop, build, maintain and
operate the increasingly critical
infrastructure that supports
national economies anddeliver
projects at the heart of
localcommunities.
UNDERSTANDING
BALFOURBEATTY
Scan or click to find
out how we are
shaping society.
CONSTRUCTION SERVICES
Our Construction Services businesses
operate across infrastructure and buildings
markets in the UK, in the US, and in joint
venture in Hong Kong.
SUPPORT SERVICES
Our Support Services businesses operate
in the UK, designing, upgrading, managing
and maintaining critical national
infrastructure.
INFRASTRUCTURE
INVESTMENTS
Our Infrastructure Investments business
develops and finances both public and
private infrastructure projects in the UK
and the US.
CAPABILITIES
@ Provides construction services across key
infrastructure sectors:
• Energy: design and construction of
large-scale, complex energy assets.
• Roads: design and construction of strategic
and major roads in the UK, US and Hong
Kong, including widening and conversion of
existing routes.
• Railways: design and management of railway
systems, delivering major multi-disciplinary
projects, track work, electrification and
powersupply.
• Airports: construction and refurbishment of
passenger terminals, transit facilities, airfield
infrastructure and associated civil works.
@ Builds commercial, defence, education,
government, healthcare, leisure, retail, and
residential buildings, providing design and
build, mechanical and electrical engineering,
shell and core, fit-out and interior
refurbishment services.
@ Delivers construction and build services for
other infrastructure, including flood and coastal
defences and public realm.
@ Constructs and maintains electricity networks
for power transmission anddistribution.
@ Provides maintenance, asset and
networkmanagement and design services
forhighways, railways and otherpublicassets.
@ Delivers support services across a range
ofutility assets.
@ Invests directly in various assets, mainly
infrastructure with post-construction
management opportunities.
@ Operates a UK and US portfolio of service
concession assets.
@ Invests in real estate, particularly private
military housing, student accommodation
andmultifamily housing.
@ Provides real estate management services,
including property development and
assetmanagement.
@ Realises asset value through disciplined
disposals executed with a clear focus on
shareholder value.
CUSTOMERS
Public, private and regulated entities.
Balfour Beatty plc | Annual Report and Accounts 2025
8
Strategic report Governance Financial statements Other information
2025
83%
2025
95%
2025
0.08 LTIR
2025
140 tCO
2
e
2025
£252m
2025
£1,446m
OUR STRATEGY: BUILD TO LAST
NET CASH £m
790
815
842
943
1,446
21 22 23 24 25
UNDERLYING PROFIT
FROMCONTINUING OPERATIONS £m
197
279
228
248
252
21 22 23 24 25
EMPLOYEE ENGAGEMENT INDEX %
76
80
81
84
83
21 22 23 24 25
CUSTOMER SATISFACTION
AVERAGE %
96
95
95
96
95
21 22 23 24 25
LOST TIME INJURY RATE (LTIR)
excluding international joint ventures
0.19
0.15
0.11
0.09
0.08
21 22 23 24 25
TOTAL SCOPE 1 AND 2 EMISSIONS
(tCO
2
e) 000S
138
147
145
144
140
21 22 23 24 25
Build to Last is Balfour Beatty’s strategy for continuous improvement. It is the
day-to-day guide we use to uphold our purpose and underpins everything we do.
LINK TO OUR KPIs
LEAN
We create value for our customers
anddrivecontinuous improvement
We are thoughtful and agile, continuously challenging
ourways of working to improve health and safety and
productivity, eliminate waste and enhance quality to make
usmorecompetitive.
EXPERT
Our highly
skilledcolleagues
and partners set
usapart
Our people are leaders.
We’re the experts of today
and inspire the leaders of
tomorrow. We invest in
our colleagues, building
their skills and knowledge,
to develop a passionate,
world-class workforce
drawn fromallparts of
our society.
TRUSTED
We deliver on our
promises and we
do the right thing
We build trust every day
by delivering on our
promises, always. We’re
accountable for our
decisions and work
withthe upmost integrity
to ensure we’re making
the rightchoices.
SAFE
We make
safetypersonal
Safety is our licence to
operate. Nothing is more
important than the health,
safety andwellbeing of
ourcolleagues andthe
communities we serve.
Weareunrelenting and
uncompromising in our
commitmentto achieving
Zero Harm.
SUSTAINABLE
We act responsibly
toprotect and
enhance ourplanet
andsociety
We leave a positive legacy
for the people we work
with, the communities we
work in, and the world in
which we operate. We
want to enhance our
impact on the environment,
working with our supply
chain partners, customers
and communities to ensure
our choices are sustainable.
Find out more
onpages:
p69p69
p56 p40 p35 p42
Our Build to Last strategy is measured against our five values:
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GROUP CHIEF EXECUTIVE’S REVIEW
A powerful
platform for
thenext chapter
ofgrowth
Since joining in September, I’ve been truly
impressed by the depth of talent across
BalfourBeatty and the inherent strength of
theGroup. Our capabilities, the quality of our
order book and our disciplined approach to risk
provide a powerful foundation for the future.
In 2025, the Group delivered on expectations
with further earnings growth, fuelled by strong
operational performance and momentum in chosen
growth markets, where our end-to-end expertise,
proven delivery and long-standing customer
relationships continue to differentiate
BalfourBeatty.
As the industry faces unprecedented demand
and a widening skills gap, we’ll continue to invest
in our people and in technology, driving further
gains in productivity and operational excellence.
Supported by a robust balance sheet and a
resilient diverse business model, we are
incredibly well positioned to respond to market
dynamics, accelerate profitable growth, improve
margins and drive value creation for our
customers, communities, and shareholders.
Further profitable growth
achievedin2025
Balfour Beatty delivered a further successful
period of operational and financial performance
in2025. For a fifth consecutive year, the Group
achieved profitable growth from its earnings-based
businesses (Construction Services and Support
Services), demonstrating the consistency and
reliability of its diverse portfolio, while materially
increasing the forward order book, operating
cashflow and shareholder returns.
The Group’s ambition to increase earnings-based
business PFO in 2025 was achieved with a 16%
increase to £293 million, which contributed to the
Group’s underlying profit for the year improving
to £239 million (2024: £227 million). Non-underlying
items after tax were a credit of £25 million (2024:
charge of £49 million). The year end order book
grew by 23%, driven by the addition of long-term
power generation projects in the UK, average net
cash increased to £1,212 million compared to
£766 million in 2024 and £189 million of cash was
returned to shareholders (2024: £161 million) through
a combination of dividends and share buybacks.
“ Since joining in
September, I’ve been truly
impressed by the depth
oftalent across Balfour
Beatty and the inherent
strength of the Group.
Our capabilities, the
quality of our order book
and our disciplined
approach to risk provide
apowerful foundation
forthe future.”
Philip Hoare
Group Chief Executive
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Outperformance in UK operations
drives portfolio progress
Profitable growth was delivered in both the
earnings-based businesses in 2025. Balfour Beatty’s
geographical, operational and contract diversity
remains a key strength of the Group and was
once again an important factor in the consistency
of the Group’s financial results. Construction
Services PFO increased 8% to £171 million,
asgrowth in the UK Construction PFO margin
toabove its long-standing 3% target was partially
offset by lower profitability in US Construction,
where growth in US Buildings was outweighed
by cost overruns at a US Civils project. Gammon’s
PFO was also slightly down due to lower revenues,
although PFO margin improved as forecast.
Support Services grew revenue by 18% while
delivering PFO margins ahead of its targeted
6-8% range, resulting in PFO increasing 31% to
£122 million. Infrastructure Investments achieved
its disposal targets for the year, delivering
£36million of gains and £120 million of proceeds,
which exceeded the Directors’ valuation; however
it recorded lower PFO due to additional costs in
US military housing. During the year, the Group
agreed with the US Department of Justice to
extend both Balfour Beatty Communities’ plea
agreement and monitorship to6 June 2026 to
allow the Group further time tocomplete planned
remediation work.
The Directors’ valuation of the Investments
portfolio reduced by 15% to £1.1 billion (2024:
£1.3 billion), due to the disposal of 12 assets,
increased discount rates and sterling strengthening
against the US dollar.
The Group has forecast further profitable growth
in 2026 and beyond, driven by its focus on four
core growth markets: UK energy, UK transport,
UK defence and US buildings. Additionally, costs
are expected to reduce following completion of
both the independent compliance monitor’s work
with Balfour Beatty Communities and the delayed
US Civils project. In Infrastructure Investments,
following the agreement of a 25-year ground
lease extension at Fort Carson in Colorado early
in 2026, the Group successfully completed a
refinancing which raised $444 million for a major
redevelopment of the community, including
c.400 new homes and the renovation ofover
300existing homes.
Long-term UK energy contracts
driving order book expansion
The Group’s order book increased by 23% to
£22.7 billion in 2025 (2024: £18.4 billion), with
growth in each segment of the earnings-based
businesses. While demand remained strong in
the majority of Balfour Beatty’s key markets,
themain driver of the order book’s increase is
the addition of projects linked to the UK’s energy
transition, with the Group converting over
£3.5billion of power generation orders for the
Sizewell C and Net Zero Teesside power stations,
while increasing the power transmission order
book by almost 40%. The Group also delivered
notable order book growth in UK rail, US roads
and Hong Kong buildings.
In a period of unprecedented infrastructure
demand, the Group continues to be selective in
the work it undertakes, using increased bid
margin thresholds and utilisation of disciplined
risk frameworks and contract governance to
reduce risk and raise quality in the forward order
book. As a result, the order book comprises a
project portfolio that the Group believes has the
appropriate contractual terms and conditions for
the risk undertaken. UK Construction is heavily
weighted towards lower-risk target cost and
costplus incentivised fee contracts, whilst
USConstruction is heavily weighted towards
buildings projects, for which the Group ensures
early issuing of subcontracts and insurance of
thesupply chain in order to protect its margin.
In addition to the reported order book, the Group
has a deep pipeline of work which it has been
selected for but has yet to go to contract. This
represents a further significant volume of future
activity and includes much of the work which has
been awarded in both the power transmission
and distribution sector and in the UK defence
sector, which is being contracted on a phased or
task order basis. It also includes c£2.5 billion of
US Buildings projects which have been awarded
but not contracted and the £1.2 billion Lower
Thames Crossing road project in the UK.
OUR INVESTMENT PROPOSITION
Attractive future shareholder returns
underpinned by sustained growth
opportunities and financial strength.
1. High-quality and
de-risked portfolio
@ Diverse portfolio across UK,
USandHong Kong
@ £22.7 billion order book
@ Robust governance and
disciplinedbidding
2. Expert capability
@ Track record of complex
infrastructuredelivery
@ Unique end-to-end capabilities
@ Industry-leading employee engagement
3. Sustained growth drivers
@ Governments driving growth
throughinfrastructure
@ Capabilities aligned to growth markets
@ UK demand outweighing supply
4. Responsible goals
@ Evolved sustainability strategy launched
in 2024
@ Net zero carbon emissions targets
verified by SBTi
@ Ambitious community targets
5. Financial strength
@ Strong cash generation
@ £1.1 billion Investments portfolio
@ Sector leading balance sheet
“ In 2025, the Group delivered
on expectations with further
earnings growth, fuelled by
strong operational performance
and momentum in chosen
growth markets, where our
end-to-end expertise, proven
delivery and long-standing
customer relationships
continue to differentiate
Balfour Beatty.”
£1.2bn
of shareholder returns 2021– 2026
Balfour Beatty plc | Annual Report and Accounts 2025
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2025 snapshots
Below are photos from Philip’s travels – projects, people and the
places where our work is making a difference around the world.
GROUP CHIEF EXECUTIVE’S REVIEW CONTINUED
1
5
9
4
87
3 6
2
1. Philip on site at HS2’s Old Oak Common station in London during
September Safety Month, taking part in a ‘Let’s talk’ session
focused on open dialogue and shared responsibility for safety.
2. A trip to the US to meet Eric Stenman, President and Chief
Executive Officer, Balfour Beatty’s US Buildings & Civils business,
to discuss complex builds, epic engineering feats and
top-secret theme parks.
3. Philip touring the Los Cerritos school project in California,
meeting site teams and gaining first-hand insight into progress
and delivery on the ground.
4. Hosting a town hall at our Portland office in the US, bringing
colleagues together to discuss performance, priorities and
Balfour Beatty’s future direction.
5. Meeting colleagues in Bengaluru, India, to explore how our
digital capability is shaping overhead lines, substations and
M&E delivery systems.
6. Philip experiencing how digital twins are being used on our
Cyberport commercial development in Hong Kong to support
safer and more efficient planning of activities such as painting
and manual handling.
7. On site at the M25 Junction 10/A3 Wisley Interchange project
in Surrey, seeing progress on this major infrastructure upgrade
designed to improve journeys for road users.
8. Visiting the Bramford to Twinstead Network Optimisation
project, a significant National Grid infrastructure upgrade
supporting the UK’s transition to cleaner, more secure energy.
9. Philip presenting at the UK Early Careers Festival (#ECFEST25)
in Birmingham, speaking to more than 400 graduates and
apprentices about the skills and careers needed to deliver
thenext generation of UK infrastructure.
Balfour Beatty plc | Annual Report and Accounts 2025
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Positive market outlook supporting
further growth
Throughout 2025, Balfour Beatty has continued
to focus on its four chosen growth markets – UK
energy transition and security, UK transport, UK
defence, and US buildings – and the outlook for
each, combined with the Group’s order book,
underpin the firm expectation of further growth
from the earnings-based businesses in 2026
andbeyond.
In the UK, the Government set out a 10-year
infrastructure strategy as it looks to deliver on
itsobjective to stimulate economic growth
byinvesting in and enabling infrastructure
development. Supported by the publication of
The Infrastructure Pipeline and a commitment
tofinance at least £725 billion of the cost while
seeking further material investment from the
private sector, this longer-term approach brings
improved certainty and clarity for the industry,
allowing UK contractors and their suppliers to
plan accordingly and invest in capability. In the
US, US Buildings’ organic growth strategy and
lower interest rates have contributed to the
division’s encouraging progress.
@ UK energy: The essential long-term upgrade
to the UK’s energy infrastructure is well
underway, driving improvement in energy
security and facilitating the energy transition,
with significant and timely investment in
bothgeneration and network infrastructure
necessary to meet the Government’s net zero
targets. Balfour Beatty is heavily involved in
projects such as the new nuclear power
stations at Hinkley Point C and Sizewell C,
theNet Zero Teesside power station with
carbon capture, and across the UK with its
market-leading power transmission and
distribution capability.
@ UK defence: In June, the UK Government
released the Strategic Defence Review,
declaring defence as an engine for growth.
Government plans to strengthen national
security and modernise defence infrastructure
are bringing material opportunities to market,
with these schemes increasingly requiring
contractors with high-security experience and
end-to-end capabilities. Balfour Beatty’s
capabilities and credentials, including its
experiences in civil nuclear construction, are
well matched to these requirements and in
2025 the Group was selected by Rolls-Royce
for a second long-term project as part of its
AUKUS expansion, following a similar award
in2024.
@ UK transport: Investment in the UK transport
network is an important component of the
Government’s growth plans and is essential to
address ageing infrastructure, net zero targets
and domestic and international connectivity.
Given Balfour Beatty’s capabilities in the
construction and maintenance of road and rail,
and its experience in delivering major airport
projects, the Group is well positioned to
capitalise on transport opportunities when
they arise, with growth expected in the
medium term.
@ US buildings: The US buildings sector in
Balfour Beatty’s target states is poised for
further growth, supported by steady economic
expansion, robust public-sector spending and
favourable demographic trends. There are
encouraging forecasts in the division’s specialist
industries, with increased investment in
education, leisure, and data centres. The
Group has also seen encouraging results from
its organic growth strategy, as a result of
further geographic diversification.
Growing and attracting an
engagedworkforce
Balfour Beatty’s greatest assets are its people and
their capabilities and, as demonstrated by the
order book growth in the year, the demand for
these remains extremely strong across a range of
markets. As the Group continues to deliver on its
growth aspirations, the focus on attracting and
recruiting new talent and retaining its existing
experts grows in tandem, as the Group looks to
closely match the rising trajectory of work with a
growing, and appropriately skilled, workforce.
The annual employee engagement survey is
anessential tool for the Group to assess its
ownperformance and the progress made in the
year. In 2025, the survey results remained
industry-leading, with overall employee engagement
at 83% (2024: 84%), which is 8% higher than
benchmark engagement scores for the industry.
During 2025, the Group has continued with its
four pillared people strategy – Attract, Retain,
Grow and Thrive – empowering colleagues to
excel and build rewarding careers. From early
careers to experienced hires to senior leadership,
investment is being made in the skills needed
todeliver demand, supported by inclusive
leadership, data-led learning and a consistent,
high quality employee experience. Across the
UK, US and Hong Kong, this approach is locally
tuned but globally aligned, ensuring the Group
has the capacity, capability and culture to deliver
for its customers – safely, ethically and with
pride. In the Group’s fastest growing market,
Power Transmission and Distribution in the UK,
the business welcomed over 500 new starters
for the second year in a row, facilitating a near
doubling of revenue over those two years.
Toretain its talent, Balfour Beatty focuses on
providing an inclusive environment where its
people feel valued and can be productive, and
theGroup’s voluntary attrition rate in the UK
remained stable at 10%. At year end, 8.9% of
the UK workforce were apprentices, graduates
and sponsored students in ‘earn and learn’
positions, exceeding both The5% Club’s base
target and overall average.
Further work required in journey
toZero Harm
Health, safety and wellbeing (HS&W) remain the
highest priority for Balfour Beatty, underpinned
by strong governance and accountability, with
mental health treated like physical health to
ensure a holistic approach. Sadly, despite the
Group’s relentless focus on its Zero Harm goal,
one colleague tragically lost their life during the
year while working on the decommissioning of
asteel propane tank in the US. The Company
offers its deepest sympathy and support to their
family, friends and co-workers. The Group is
determined to learn from this event, and to
implement the findings from this incident. During
the year, new learning and sharing forums across
key working areas have been initiated, which aim
to ensure that Balfour Beatty drives, shares and
consistently adopts the common best practice
across the whole business.
The Group tracks HS&W statistics closely in
itsefforts to achieve continuous improvement.
Further progress has been made with most of
these KPIs in 2025, most notably in voluntary
safety observations, which increased by 67%
toover 780,000 across the Group’s activities.
This level of engagement highlights not only
theaccountability for HS&W recognised by
colleagues, but also how embedded safety is in
the Group’s culture. Lost time injuries (excluding
international joint ventures) reduced in both rate
and absolute numbers from 0.09 (100 injuries) in
2024 to 0.08 (89 injuries) in 2025, with both US
and UK operations recording their lowest rates
todate. The Group did note a slight increase in its
major injury rate of 0.01; this was predominantly
due to lower-limb injuries and slips, trips and
falls. A working group has been convened to
identify the risk factors that have led to the rise.
Balfour Beatty plc | Annual Report and Accounts 2025
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Further work required in journey
toZero Harm continued
The Group continues to leverage technology to
improve HS&W. At road projects in North Carolina,
the Group has deployed a communication network
called Safety Cloud. This sends real-time digital
alerts to motorists within a one-mile radius of
work activities, warning of work zones, lane
closures and hazards. These alerts, integrated
with platforms like Apple Maps, Waze and
in-vehicle systems, give drivers vital time to
slowdown and manoeuvre safely. In the UK,
thewidespread adoption of digital permits, as
well as a revised, reinforced utilities avoidance
procedure, contributed to a 30% reduction in
underground service strikes.
Sustainability central to delivering
long term resilience and performance
During 2025, Balfour Beatty continued to
embedand strengthen its Building New Futures
sustainability strategy, launched in 2024 to reflect
the evolving environmental, social and governance
landscape. The six focus areas – net zero, resource
efficiency, community value, supply chain
integrity, nature positive, and employee diversity,
equity and inclusion– remained central to delivering
long-term resilience and positive outcomes. The
Group’s first double materiality assessment
validated these priorities and reinforced the
alignment between its strategy, risk management
and external expectations, while emphasising the
importance of governance, ethics and transparency.
Progress was recognised through an improvement
in the Group’s FTSE4Good ESG score.
Capability and collaboration continue to be built
across Balfour Beatty, including through the
newSprouting Sustainability Network, which
empowers early-career professionals to drive
meaningfulchange.
GROUP CHIEF EXECUTIVE’S REVIEW CONTINUED
The Group also advanced its climate and nature
agendas by maturing carbon reporting, preparing
for emerging regulation, and completing the
firstfull year of implementing its Nature
PositivePrinciples.
In 2025, the Group delivered £1,012 million
(2024: £991 million) of social value, including
spend with local suppliers and local businesses,
and volunteering. The Group also achieved a
2.3% reduction in absolute carbon emissions
anda 7.8% intensity reduction in Scope 1 and 2
greenhouse gas (GHG) emissions.
Increased dividends and share
buybacks in 2026
Continuity in Balfour Beatty’s capital allocation
framework, which has been in place since 2021,
has been an important factor in the Group delivering
attractive shareholder returns over the period,
while ensuring the appropriate balance between
investment in the business and a strong capital
position. 2025 has been a further important step
in the Group’s growth, with positive progress
made with regard to revenue, margin, order
book, balance sheet and outlook. As a result,
theBoard has confidence that the Group will
continue to deliver significant future shareholder
returns and as such is today recommending
afinal dividend of 9.8 pence per share
(2024:8.7pence), giving a total recommended
dividend for the year of 14 pence per share
(2024: 12.5 pence). Additionally, the Company
intends to repurchase £200 million of shares
during the 2026 phase of its multi-year share
buyback programme, bringing the cumulative
return to shareholders since the introduction
in2021 of the multi-year capital allocation
framework to over £1.2 billion.
The total cash return to shareholders in 2026
(including the final 2025 dividend and 2026
interim dividend) is therefore expected to be
c.£267 million (2025: £189 million).
Outlook
The Board expects a high single-digit percentage
increase in PFO from its earnings-based businesses
in 2026. This includes further underlying margin
growth in UK Construction (when excluding the
£11 million insurance recovery in 2025), improved
US Construction margin, with the delayed Civils
highway project expected to complete around
the middle of the year, and increased Support
Services PFO, with further growth in power
volumes and PFO margin remaining above 8%.
Infrastructure Investments PFO for 2026, prior
todisposals, is forecast to be a small loss and is
aligned to the Group’s agreement with the US
Department of Justice to extend both Balfour
Beatty Communities’ plea agreement and
monitorship to 6 June 2026.
Infrastructure Investments is expected to
continue to deliver attractive end-to-end returns
from its recurring income, by divesting assets
and making new investments in line with the
Group’s capital allocation framework. Following
asignificant level of activity in 2025, gains on
disposal are expected to be lower in 2026, in
therange of £5-15 million, as the Group times
itsasset sales to capture maximum value.
The Board expects net finance income in
therange of £28-32 million for 2026 and for
theeffective tax rates in each of the three
geographies to remain close to statutory
rates,albeit with cash tax payments in the
UKremaining below statutory levels in the
medium term as losses are utilised. Average
netcash in2026 is expected to be in a range
of£1.3-1.5billion, with capital expenditure
between £40 and £50 million and working
capitalremaining broadly unchanged.
The Group’s long-term outlook remains positive,
with the growth forecast in 2026 and 2027 being
driven by strong visibility from its high-quality
order book, alongside the further opportunities
inthe energy, transport and defence sectors in
the UK and the Group’s chosen buildings sectors
in the US. This gives the Board confidence in
Balfour Beatty’s continued ability to deliver
profitable managed growth and sustainable
cashgeneration, and in turn significant ongoing
shareholder returns.
Philip Hoare
Group Chief Executive
10 March 2026
Balfour Beatty plc | Annual Report and Accounts 2025
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Strategic report Governance Financial statements Other information
PIONEERING SUSTAINABLE
POWER GENERATION
£833m
Secured for the Net Zero
Teesside contract
DRIVING THE UK’S GRID
TRANSFORMATION
£8bn
Appointed to National Grid’s
Electricity Transmission
Partnership
EXECUTING NATION DEFINING
INFRASTRUCTURE
£38bn
Sizewell C nuclear project –
delivering one-third of civil
engineering works
MARKET REVIEW
Well
positioned
infour
growth
markets
Capitalising on high-growth
markets where the Group has
the capabilities and aproven
track record to secure
newopportunities.
UK ENERGY
The UK’s energy system is undergoing a structural
transformation as net zero ambitions accelerate.
Electrification of transport, heat andindustry is
driving higher electricity demand,while government
policy supports long-term investment in low-carbon
generation and transmission.
This is creating a sustained pipeline of large-scale,
complex infrastructure projects, highlighting the
value of integrated delivery capability across
high-voltage, civil engineering and programme
management disciplines.
Market trends
Grid modernisation
Transmission capacity remains the key barrier to
deployment of renewables, storage and regional
energy clusters. In response, transmission owners
and distribution network operators are accelerating
investment in overhead line upgrades, HVDC links,
strategic substations andreinforcement of existing
assets. Delivery at pace is essential, increasing
demand for partners with high-voltage expertise,
regulatory understanding and experience managing
multi-year, complex programmes.
Large-scale nuclear generation
Nuclear power remains central to the UK’s
low-carbon strategy, with ongoing projects
suchas Hinkley Point C focused on providing
areliable baseload to complement variable
renewable sources. New nuclear is expected to
more than replace the generation capacity coming
offline, with Sizewell C securing £14.2 billion of
UK Government support. These commitments
are driving sustained demand for civil engineering,
enabling works and complex structural and
mechanical construction, favouring companies
with large-scale nuclear delivery experience
andstrong programme management capability.
Small modular reactors
Small modular reactors (SMRs) are emerging
asacore element of the UK’s nuclear strategy
and backed by £2.5 billion of government funding.
InJune 2025, Great British Energy – Nuclear
named Rolls-Royce SMR as its preferred bidder,
advancing the programme into contracting and
early development. The UK’s goal of up to 24GW
of nuclear capacity by 2050, coupled with rising
private sector interest, is driving demand.
Growing demand for SMR deployment increases
the need for repeatable site preparation, civil
works and enabling infrastructure from
experienced nuclear partners.
Carbon capture
Carbon capture, usage and storage (CCUS)
industrial facilities are emerging as a national
strategic priority to support industrial decarbonisation
and low-carbon infrastructure, and are supported
by a growing project pipeline and government
funding, including £21.7 billion for CCUS projects.
This is creating a broad range of opportunities for
large-scale projects across energy and industrial
end-markets. These projects align closely with
Balfour Beatty’s capability in managing technically
demanding, complex infrastructure programmes.
Scan or click to
learn about the
NetZero Teesside
contract.
Scan or click to learn
about the National
GridElectricity
Transmission
Partnership.
Scan or click to
learn about the
Sizewell C
nuclearproject.
2025 momentum
@ Awarded the north-east region of
National Grid’s £8 billion Electricity
Transmission Partnership.
@ Secured two spots on National Grid’s
£59 billion High Voltage Direct Current
supply chain framework.
@ Secured a place on SP Energy
Networkstransmission business’
Strategic Agreement for Overhead
LineWorks framework.
@ Signed the Programme Alliance
Agreement to deliver Sizewell C
civilworks.
@ Signed an £833 million contract
withTechnip Energies to act as
theconstruction partner for
NetZeroTeesside.
Our growth markets:
UK ENERGY
UK TRANSPORT
UK DEFENCE AND SECURITY
US BUILDINGS
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Strategic report Governance Financial statements Other information
UK TRANSPORT
The UK transport sector is evolving rapidly due to
urbanisation, population growth and government
policies on decarbonisation, resilience and modal
shift. Transport is viewed as a driver of economic
growth, with public investment sustaining demand
for complex civil engineering, programme
management and electrification capabilities.
Market trends
Rail
Rail remains a key government priority, underpinned
by Network Rail’s £45 billion Control Period 7
(2024-2029). Demand for major programmes
continues – including HS2 between Birmingham
and Euston, the £10.2 billion of non-HS2
enhancements, such as East West Rail and the
Transpennine Route Upgrade, and the reaffirmed
commitment to Northern Powerhouse Rail.
This sits alongside a stable pipeline of renewals,
maintenance and operations work delivered
through long-term frameworks like the Central
Rail Systems Alliance and the Supply Chain
Services framework. Together, these programmes
require multi-disciplinary design and engineering,
with a strong focus on integrateddelivery.
Strategic Road Network
The Strategic Road Network continues to receive
government support, with £891 million for the
Lower Thames Crossing alongside secured funding
for five strategic schemes, including the A66 where
Balfour Beatty is undertaking pre-construction
activities. The £25 billion, five-year funding
envelope for the Road Investment Strategy 3
(RIS3) provides welcome certainty, with a focus
on modernisation, technology and network
resilience – ultimately sustaining demand for
asset management and renewal work through
long-term frameworks such as National
Highways’ Scheme Delivery Framework 2.
Balfour Beatty’s proven capabilities in operations,
maintenance and structural works means we are
well placed to respond to this shiftingfocus.
Local roads and maintenance
Continued demand for maintenance, resurfacing,
widening and bypass schemes – such as the
North Hykeham Relief Road – is supported by
devolved long-term funding and local authority
reorganisation. The Government has committed
£15.6 billion between 2025 – 26 and 2031 – 2032
through the Transport for City Regions
settlements, alongside £7.3 billion for local
highway maintenance between 2026 – 2027
and2029 – 2030. This underpins multi-year
programmes of structural, civil engineering
andmaintenance works focused onrenewal
andnetwork resilience.
Public realm and urban transport
Urban transport schemes – including tram, metro
and bus network expansions – are growing under
policies to reduce congestion, emissions and
cardependency, supported by Transport for
CityRegions funding. The government will also
invest£2.3 billion by 2029 – 2030 via the Local
Transport Grant, supporting public realm, cycling
and pedestrianisation projects aligned with
low-carbon transport objectives.
Aviation
Investment in airport infrastructure is expected
torecover, driven by capacity constraints,
modernisation and decarbonisation. Major
airports are progressing expansion plans –
including Heathrow’s proposed third runway and
Gatwick’s £2.2 billion standby runway programme
– creating opportunities for terminal upgrades,
runway works and landside infrastructure.
2025 momentum
@ Delivered major HS2 milestones,
including Bromford Tunnel, Tame West
Viaduct, A46 box-slide and high-speed
platform slabs at Old Oak Common.
@ Secured approximately £700 million
ofnew UK Rail work, covering civil
engineering under CP7, track renewal
viathe Central Rail Systems Alliance,
and fleet supply and operations for
Network Rail.
@ Advanced Early Contractor Involvement
(ECI) activities at Lower Thames
Crossing and the A66 Northern
Transpennine project.
@ Commenced construction on A57 Link
Roads and the M3 Junction 9 upgrade
for National Highways.
@ Progressed A9 dualling between
Tomatin and Moy in Scotland.
@ Delivered highways maintenance
contracts for Buckinghamshire,
EastSussex and Lincolnshire
CountyCouncils.
@ Continued operational and maintenance
services for the M25 network through
our Connect Plus Services joint venture.
@ Secured extension of the Highway
Services Partnership contract with
Southampton City Council until 2030.
£92bn
Prioritised public funding in road and rail
Backed by the £92 billion Spending Review
settlement, the UK transport sector offers
a diverse and growing pipeline of road, rail,
bridge and maintenance projects. From
major upgrades to essential maintenance
and local connectivity works, this
investment highlights a strong, long-term
market opportunity for contractors
delivering critical transport infrastructure.
Source: UK Department for Transport and HM Treasury
MARKET REVIEW CONTINUED
Above: Artist’s impression of Lower Thames Crossing in Kent.
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UK DEFENCE AND SECURITY
The UK defence sector is undergoing sustained
investment to support nuclear deterrence,
modernisation of the Armed Forces, and homeland
resilience. Rising defence budgets, ageing estate
assets and increasing cyber and operational security
requirements are generating a multi-decade
pipeline of complex infrastructure, technical
buildings and specialist manufacturing facilities.
Market trends
Nuclear deterrent facilities
The Defence Nuclear Enterprise (DNE) remains
central to the UK’s strategic deterrent. Investment
priorities under the 2025 Strategic Defence
Review support delivery and enhancement of
thecontinuousat-sea deterrent and ongoing,
sovereign warheadprogramme. Estate-wide
modernisation includesMinistry of Defence
(MoD)-owned sites at HMNBClyde and AWE,
while key defence prime contractor-owned
facilities – including Rolls-Royce and BAE Systems
submarine production sites – are being upgraded
to support wider DNE programmes, creating a
visible pipeline of high-value, complex projects
with secured funding.
Technical buildings
Investment is increasing in operational and technical
support buildings across the MoD andprime
contractor estates. This includes maintenance
facilities, operations hubs and other specialised
infrastructure that enables core military functions.
Projects require integrated construction,
mechanical and electrical capability to deliver
high-specification, resilient and sustainable
facilities to support long-term operational needs.
Secure and cyber facilities
As technological advances continue to change
the nature of conflict, there is a growing need
forupgrades across the MoD estate to protect
sensitive systems and data. There is increasing
demand for secure communication hubs, command
and control centres and research facilities for
emerging defence technologies, requiring contractors
with expertise in delivering high-specification
projects that meet rigorous compliance and
cyber-resilience standards.
Defence equipment manufacturing facilities
Demand is rising for purpose-built contractor-owned
facilities to support production, maintenance and
testing of defence equipment including a £1.5 billion
allocation for the construction of at least six new
energetics and munitions factories in the UK.
Secure manufacturing halls, assembly areas and
logistics centres require high-specification
structural, mechanical and electrical capability,
alongside long-term programme management
and compliance expertise.
DELIVERING COMPLEX, SECURE INFRASTRUCTURE
INHIGHLYREGULATED ENVIRONMENTS
Balfour Beatty was selected by Rolls-Royce
as the sole contractor on its fissile
construction framework.
The fissile framework will see us deliver the
critical nuclear licensed infrastructure required
to support Rolls-Royce’s manufacture of
fissile components for the Royal Navy’s
submarine propulsion systems, and the new
AUKUS submarines.
Work will include the construction of new,
highly specialised manufacturing and
processing facilities within the licensed
nuclear site boundary, the upgrade of
existingnuclear infrastructure critical for the
production of fissile materials and extensive
site-wide infrastructure enhancement
compliant with stringent nuclear safety
andsecurity regulation.
We will draw on our unique end-to-end
capabilities to support the delivery of the
programme, including our ground engineering
expertise and mechanical and electrical
engineering heritage, underpinned by our
extensive technical knowledge and experience
in working in a secure, nuclear environment.
2025 momentum
@ Selected by Rolls-Royce Submarines
Limited as the sole contractor on its
fissile construction framework.
@ Delivering the construction of new office
facilities and adjoining site infrastructure
as Rolls-Royce Submarines Limited’s
non-fissile construction partner.
@ Delivering critical upgrades for the
Defence Nuclear Enterprise at the
Atomic Weapons Establishment (AWE)
at Aldermaston.
@ Currently delivering projects for the
Defence Infrastructure Organisation
across multiple sites.
Scan or click to read about Balfour Beatty
being selected by Rolls-Royce as its
fissile construction partner.
Below: (left to right) Terry Meighan, Director of Infrastructure, Rolls-Royce and
NickCrossfield, Divisional CEO of Balfour Beatty’s UK Construction Services.
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US BUILDINGS
The US buildings sector in Balfour Beatty’s target
states is poised for growth, supported by steady
economic expansion, robust public sector
spending and favourable demographic trends.
Together, these drivers create a compelling
environment for Balfour Beatty’s US Buildings
business to capitalise on new opportunities
andgenerate sustainable long-term value in
keymarkets.
Market trends
Residential
Gradual residential sector recovery is expected
as economic conditions stabilise. In single-family
markets, recent and anticipated interest rate cuts
are driving buyer and seller activity. Demand is
strongest for entry-level and build-to-rent housing,
supported by institutional investment and
migration to more affordable Southern and
Midwestern markets. In multifamily, declining
vacancy rates signal improving demand and early
recovery. Investment remains concentrated on
value-add opportunities and office-to-residential
conversions in metropolitan areas. In Balfour
Beatty’s target states, residential construction
spending is projected to increase from US$222billio
n
in 2025 to US$246 billion in 2030.
Institutional
Institutional building spending continues to rise,
driven by demographic shifts, changing community
service requirements, ongoing infrastructure
upgrades and consistent public sector demand.
In education, public investment leads growth,
with increased funding for higher-education
facilities, while universities are expanding their
use of public-private partnerships to deliver new
student housing and mixed-use campus projects.
In healthcare, hospitals are the primary driver
ofnear-term investment, supported by growth in
specialised services and public sector initiatives,
offsetting a moderation in private sector spending.
Investment in the institutional sector in Balfour
Beatty’s target states is set to grow 4.9% per
annum between 2025 and 2030.
Commercial
Demand in the amusement and recreation sector
remains resilient as put-in-place spending increased
4% year on year in 2025 driven by global sporting
and entertainment events and a sustained shift
toward technology-enabled venues, with strong
pipeline activity expected for modernisation projects
and legacy site upgrades. The hotel construction
pipeline remains resilient, with room counts up
1% year on year. Dallas, Atlanta, Phoenix and
Austin are among our core geographies and rank
as leading cities nationally for new project activity.
In retail, activity continues to be led by fit-out and
renovation projects. In Balfour Beatty’s target states,
commercial construction expenditure rises to
US$68 billion in 2030, up from US$53 billion in 2025.
Offices
Renovation and repositioning projects underpin
office spending as owners adapt assets to evolving
workplace needs. Investment is further supported
by rapid growth in data centre development, fuelled
by growing demand for AI-related and high-capacity
digital infrastructure. Office expenditure is
forecastto increase from US$48 billion in 2025
toUS$60billion in 2030 in Balfour Beatty’s
targetstates.
Industrial
Industrial and manufacturing spending is
normalising as most CHIPS and Science Act
subsidies have been committed. Local incentives
remain pivotal, with multi-billion-dollar state-level
commitments complementing federal policies
aimed at supporting the reshoring of advanced
manufacturing. Industrial construction expenditure
reaches US$57 billion in 2030 in Balfour Beatty’s
target states.
US BUILDINGS CONSTRUCTION SPENDING IN
BALFOUR BEATTY’S TARGET STATES IS
PROJECTED TO GROW 3% PER ANNUM
Construction spending, US$bn, nominal
2025
468
543
2030
Industrial
Offices
Commercial
Institutional
Residential
Source: Dodge Construction Central
BREAKING GROUND ON THEBROOKLYN
AND CHURCH ADAPTIVE REUSE PROJECT
448 luxury apartments
Replacing disused office space with
448luxury apartments and vibrant retail
inNorth Carolina.
+3% CAGR
2025 momentum
@ Selected for K-12 works such as
renovations, modernisations and site
improvements to educational and
athletics facilities throughout California,
totalling more than US$768 million.
@ Awarded public civic works across the
North-west, Texas and California,
including local fire and police stations,
city buildings and criminal justice facilities.
@ Awarded The Strand, a 20-storey
multifamily high-rise on behalf of
KaneRealty, Corp. as part of its
NorthHills Innovation District, a
US$1billion mixed-use campus in
Raleigh, North Carolina.
@ Awarded federal contracts for the US
Navy, Marine Corps, Air Force and other
government facilities within the Naval
Facilities Engineering Systems Command
(NAVFAC) Washington area of operations
in the Mid-Atlantic.
@ Awarded a nearly US$200 million
multi-year phased contract to deliver
aconfidential mission-critical facility
inthe Mid-Atlantic.
@ Awarded a US$72 million contract to
deliver restroom renovations at Orlando
International Airport.
MARKET REVIEW CONTINUED
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US CIVILS
The US civils sector in Balfour Beatty’s target
states remains robust, supported by sustained
federal funding, the replacement of ageing
assets and a manufacturing boom that is
increasing demand for transport infrastructure.
Market trends
Highways
US highway activity continues to be underpinned
by substantial federal investment and robust
state-level funding programmes, including
multi-billion US$ Statewide Transportation
Improvement Programmes and Caltrans’
plannedUS$4.9 billion investment in California.
Rail
US rail is in a sustained investment cycle, underpinned
by the Infrastructure Investment and Jobs Act’s
US$102 billion rail funding envelope and expanded
Federal Railroad Administration grant programmes,
supporting safety, capacity and renewal works
across passenger corridors and freight networks.
Water
US Environmental Protection Agency investment
programmes are sustaining momentum in
thewater sector, unlocking nearly US$7 billion
infinancing for water infrastructure projects.
InCalifornia, an important market for Balfour
Beatty, annual water infrastructure spending
isexpected to reach US$3.3 billion by 2030.
Ports
California’s port investments offer a major
opportunity, fuelled by growing global trade and
the need for modern infrastructure. Multi-billion
US$ capital programmes of the Port of Long
Beach and Port of Los Angeles, together with the
California State Transportation Agency’s additional
US$1.5 billion investment, ensure that the region
remains competitive and resilient in the face of
rising demand.
GAMMON
Gammon is driving growth through transport
infrastructure, the Hong Kong buildings market
and data centre expansion in Singapore.
Market trends
Hong Kong
Buildings
The Northern Metropolis continues to serve as a
major engine of growth, unlocking investment
across housing, industrial and technology sectors.
Additionally, the Hong Kong Housing Authority
aims to deliver 176,000 public housing units by
2031, while the supply target for private housing
over the next decade is projected at 126,000 units.
Transport
Hong Kong is expanding and upgrading its
existing transport infrastructure through the
Major Transport Infrastructure Development
Blueprint, designed to meet population growth,
commuting needs and enhancing the city’s
logistics capacity. In aviation, the Hong Kong
Airport Authority’s HK$170 billion SKYTOPIA
project aims to transform the airport area into
acomprehensive city hub.
Singapore
Transport
Singapore is making substantial investments in
transport infrastructure, with major projects such
as the Jurong Region Line, Downtown Line extension
and Phase 2 of the Cross Island Line currently
under construction. In addition, the Government
has committed a further S$6 billion to advance
the development of the Changi Airport air hub.
Data centres
The Green Data Centre Roadmap aims to deliver
at least 300 MW of additional capacity in the
near term and seeks to leverage green energy
sources and solutions to unlock further growth.
INFRASTRUCTURE INVESTMENTS
Balfour Beatty Investments is focused
onhigh-demand residential, energy and
infrastructure markets.
Investment focus
Student accommodation
Demand for student accommodation remains robust
across both on-campus facilities and purpose-built
off-campus housing, supported by sustained
enrolment growth and shifting student preferences.
EV charging infrastructure
Rising electric vehicle adoption is creating new
opportunities for us in the charger deployment
market, supporting continued expansion in this
strategic segment.
Nascent energy transition
As the UK’s energy mix continues to shift
towards renewable sources, the Group continues
to assess
the implications for future investment and
construction opportunities across this evolving market.
Military housing
We continue to actively manage our extensive
portfolio of privatised military housing communities
across the US, ensuring high-quality, long-term
accommodation solutions for service members
andtheir families.
Multifamily housing
The US multifamily sector continues to see
new-to-market assets entering the market,
presenting us with opportunities to invest in the
regeneration and enhancement of these assets.
Public-private partnership projects
With legislation enabling public-private
partnership (P3) projects now enacted in
42states, we are well positioned to pursue
opportunities across courthouses, schools,
government facilities and transport projects.
REBUILDING A CRITICAL
INTERSTATESECTION
US$746m
Contract secured for Interstate 35
inAustin,Texas.
US INFRASTRUCTURE CONSTRUCTION
SPENDING IN BALFOUR BEATTY’S
TARGETSTATES IS PROJECTED TO GROW
3%PER ANNUM
Construction spending, US$bn, nominal
2025
103
118
2030
Source: Dodge Construction Central
+3% CAGR
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DIGITAL
Reimagining
construction through
digital innovation
We continue to implement new advancements in
digital and AI to drive safer, more productive and
better assured delivery across the Group.
Weutilise human form recognition to mitigate plant people interface
risk,aswell as biometric site access to enhance security and compliance.
Inaddition, over 97,810 digital safety permits were issued in 2025 to reduce
high potential (HiPo) incidents. In 2025, 783,842 observations and examples
of good practice were submitted across the Group – almost double the
previous year. These observations guide interventions that ensure health,
safety and wellbeing, and support us in meeting quality standards for
ourcustomers.
Read more about our digital safety journey on page 36.
In the UK, we trialled Certchain, an AI-powered compliance platform to
support the Supervisor Passport Scheme – a mandatory minimum training
requirements programme to help supervisors maintain and improve an
operational standard and secure a consistent behavioural safety legacy.
Certchain brings together data from the Supervisor Passport Scheme,
theConstruction Skills Certification Scheme and the Construction Industry
Training Board into one simple dashboard, giving us real-time visibility of
training and certification status. The tool is now being rolled out more
widely across the UK.
We have also invested £7.5 million in a fully ring-fenced cybersecurity
platform. Hosted in a UK-based Microsoft Azure data centre and aligned
toUK Government standards and clearance levels, which enables us to
work securely with client data. It provides a virtual desktop that replicated
60 Balfour Beatty applications and processes for a seamless user experience
and will also incorporate a data lake and enhanced reporting capabilities.
Read more about cybersecurity in our risk section on page 81.
WE’RE TRANSFORMING HOW BRITAIN
BUILDS THROUGH AI
In 2025, we unveiled a £7.2 million investment in Microsoft
365 Copilot – one of the largest AI investments of its kind
in the UK construction and infrastructure industry. The
investment builds on a pilot that took place in 2024, with
350 colleagues reporting a 72% increase in productivity,
saving an average of 30 minutes per day.
Hosted on Microsoft’s trusted enterprise-grade security
platform, Microsoft 365 Copilot is already delivering
measurable results. 6,848 colleagues have used Copilot
atleast once since it launched in August 2025, with
1,535,839 actions taken – assisting 115,178 hours of
taskssuch as drafting emails, summarising meetings and
generating documents, freeing up time for higher-value
work and accelerating project delivery.
We have also partnered with Microsoft to develop bespoke
industry-leading AI-powered ‘smart agents’ to improve
quality, health and safety and assurance processes. These
agents will leverage our corporate knowledge and data to
provide actionable insights for on-site decision making and
are being trialled on three of our projects in Scotland,
Wokingham and London in the UK.
“ This investment is about
ensuring our business
remains at the forefront of
competitiveness and
cybersecurity. Our decision
to collaborate with
Microsoft underscores
Balfour Beatty’s
determination to tackle the
industry’s productivity gap,
drive sustainable outcomes
and enhance safety.”
Jon Ozanne
Chief Information Officer,
Balfour Beatty
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STAKEHOLDER VALUE
About our stakeholders
From shareholders and employees to
customers, supply chain partners and the
communities we operate in, each stakeholder
group holds a vested interest in Balfour
Beatty’s activities, performance or success.
Their support, feedback and collaboration
are vital not only to drive business growth
and profitability but also to foster trust,
sustainability and build a positive,
lastinglegacy.
@ As part of the Group’s annual shareholder
engagement plan, Charles Allen, Lord Allen of
Kensington, CBE, Non-executive Group Chair,
met with a number of major shareholders;
Group Chief Executive Philip Hoare held
introductory meetings with most of the top
10shareholders; and Chief Financial Officer,
Phil Harrison met with investors in New York.
Creating value
Balfour Beatty continues to deliver on its
multi-year capital allocation framework,
announced in 2021. This provides a balanced
approach between the investment needs of
thebusiness, regular dividend payments and
additional returns to shareholders. Balfour Beatty
intends to return c.£267 million to shareholders
in 2026 through a combination of dividends and
share buybacks, bringing the cumulative return
toshareholders since 2021 to over £1.2 billion.
CUSTOMERS
Collaborative and long-term mutually
beneficial relationships with our customers
are the foundation of our success.
2025 engagement examples
@ In 2025, customer engagement was primarily
embedded in how we work through long-term
frameworks and collaborative delivery models.
We continue to work closely with customers
earlier in the project lifecycle, supporting
improved integration, data sharing and early
stage design alignment. This approach
strengthened collaboration across design, delivery
and risk management, helping customers
achieve greater certainty of outcomes.
Above: Balfour Beatty’s 2025 half year results presentation
inLondon.
Sharing
thevalue
wecreate
In striving to achieve its purpose
of Building New Futures, Balfour
Beatty touches the lives of
millions of people around the
world. Working with multiple
stakeholders across the industry
and beyond, the Group continues
to innovate and lead the market
through driving change, shaping
the debate and inspiring a new
generation of talent to be the
change makers of tomorrow.
SHAREHOLDERS
Our shareholders, as owners of the
Company, are a critical stakeholder
fortheGroup.
2025 engagement examples
@ Throughout 2025, the Company held 104
meetings with shareholders and investors,
with management holding two London-based
results roadshows in March and September.
Throughout 2025, the Group participated in four
investor conferences organised by London-based
investment banks, with additional investor
roadshows held in Leeds, York, Birmingham,
Milan, Lugano, New York, Chicago and Toronto.
@ To keep shareholders up-to-date with Company
news including financial information, we share
regular updates via regulatory announcements,
webcasts and presentations.
104
shareholder meetings held in 2025
95%
customer satisfaction average
@ As an industry leader, we know that freely
sharing best practice is the best way to help
theindustry develop and evolve. In 2025,
wecontinued with our ‘five-minute reads’
publishing two papers on ‘Leading the
industry’s hydrogen revolution’ and ‘Building
the fusion future’.
Scan or click to read our
‘Fiveminute read’ series.
@ Balfour Beatty led early contractor involvement
at Sizewell C, integrating designers and Civils
Works Alliance partners during enabling works
and earthworks. Building delivery capability
and skills early, helped secure development
consent, support investment decision-making,
refine costs and optimise the programme,
removing over three years from the gallery
construction schedule.
Creating value
In the UK, we marked a decade of partnership
with SCAPE, a public sector procurement
framework that has transformed how
infrastructure is delivered for a wide range
oflocal and national customers.
To date, the partnership has generated £404 million
of socialvalue, delivered over 19,800 hours in
employment and skills, contributed more than
2.7 million community hours and engaged
288education institutions. Our focus on
collaborative delivery and high standards is
reflected in consistently strong performance.
Across SCAPE projects, our teams achieved
anaverage Considerate Constructors Scheme
score of 44.6 out of 45, with multiple projects
achieving Platinum status.
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STAKEHOLDER VALUE CONTINUED
Above: In 2025, we welcomed 400 apprentices, graduates
andtrainees to our UK Early Careers Festival.
strategicrecommendations for incorporating
nature into corporate governance, strategy, risk
management and decision-making processes.
@ We continued to support capability building
through industry collaboration, including our
involvement in the UK Supply Chain Sustainability
School, where Balfour Beatty is a funder, gold
member and Board participant. Through this
collaboration, suppliers are encouraged to
access training, tools and accreditation
pathways that support continuous
improvement and help to build resilient,
capable supply chains.
Creating value
Balfour Beatty is committed to paying all supply
chain partners on time and on mutually-agreed
terms. We continually invest in our processes
and procedures to improve payment performance
and enhance accuracy and transparency through
increased automation. In the last six months of
2025, we paid 97% of invoices within 60 days,
with an ‘average days to pay’ of 35 days.
SUPPLY CHAIN AND
KEYPARTNERS
Our extensive supply chain partners across
the Group plays an instrumental role in our
success and driving best practice across
our industry.
2025 engagement examples
@ In 2025, we enhanced collaboration with UK
tier one and tier two suppliers by engaging
them early in design development, technical
assurance and planning. This fostered shared
priorities and improved outcomes in buildability,
safety, carbon reduction, quality and
environmental performance across
ourprojects.
@ In 2025, Gammon, partnered with The Hong
Kong University of Science and Technology,
Swire Properties and AXA Climate to pilot
anature-related commercial property
assessment.The framework will offer
83%
annual employee engagement score
97%
of invoices paid within 60 days in the UK
EMPLOYEES
Talented and engaged employees,
committed to upholding our values, enable
us to deliver our Build to Last strategy –
ensuring we win and expertly deliver the
best and most exciting projects, whilst
continuing to build a great place to work.
2025 engagement examples
@ My Contribution (MyC) is a critical driver for
employee-led business change and making
Balfour Beatty a great place to work. In 2025,
colleagues from across the UK and US submitted
over 1,700 ideas. More than 500 of these ideas
were implemented, generating an estimated
£1.4million of cash, £2.6 million of cost
savings and over 63,000 of time saved. Find
out more about My Contribution on page 61.
@ We continued to invest in early career
development with the Early Careers Festival
2025, which brought together about
400apprentices, graduates and trainees
fromacross the UK. The event enabled our
colleagues to engage with senior leadership,
gain deeper insight into the business and
deepen their understanding of safety,
sustainability and quality.
@ Our UK Gender and Allies Affinity Network
hosted over 40 Gender Circles during the year.
These local, in-person events were held across
projects, sites and in offices. They provided
safe spaces for colleagues to connect, share
lived experiences and discuss gender at work
– helping us to identify and address barriers
toinclusion.
Creating value
The key metric for our Expert value is employee
engagement. In 2025, our Group engagement
score reached 83%, around 8% higher the
industry average. The annual survey achieved
ahigh response rate of 84%, with more than
19,900 colleagues participating.
Above: Students from Hong Kong University of Science and
Technology with subject experts from Gammon and
SwireProperties.
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COMMUNITIES
Our activities have a lasting impact on the
communities in which we operate. We are
committed to leaving a positive and
sustainable legacy.
2025 engagement examples
@ On the HS2 Old Oak Common station project
in West London, our teams worked with
StandOut, a UK charity supporting people with
lived experience of the criminal justice system.
Through this partnership, we supported
employability by providing confidence-building
support, mock interviews and CV guidance.
@ While delivering Junction 10 of the Junction
10/A3 Wisely Interchange scheme on behalf
ofNational Highways – one of the busiest
sections of the UK’s motorway network – our
teams supported Elmbridge Community Action
on Refugees (CAN), a local charity working
with refugees and asylum seekers.
@ We engaged at a senior level on the devolution
of infrastructure budgets and regional growth
priorities, recognising the increasing role of
mayoral and strategic authorities in investment
decisions. This included convening a regional
rail roundtable in Manchester with the Mayor
of Greater Manchester and senior transport
stakeholders, as well as participating in
national forums, such as the UK’s Real Estate
Investment & Infrastructure Forum (UKREiiF),
supporting early alignment with locally-driven
infrastructure priorities.
Creating value
Through sustained, evidence-led engagement on
roadworker safety, Balfour Beatty helped secure
recognition of roadworkers as a vulnerable group
of road users in the Government’s Road Safety
Strategy. By sharing practical insight from live
projects and engaging directly with policymakers
through parliamentary activity, we brought
national attention to the risks faced by those
working on the road network.
Throughthis partnership, our teams provided
career mentoring, including resume-writing,
interview practice and employability guidance
to help individuals build confidence and access
employment opportunities.
@ After a devastating fire broke out at Wang Fuk
Court in Tai Po, Gammon responded in unity.
Over seven days, more than 500 volunteers
from across the business helped to install
flooring in interim housing. The Housing
Secretary, Ms Winnie Ho, publicly praised
Gammon’s swift and compassionate response.
In the US, our team worked with the student-led
Eagle News Broadcasters at Cesar Chavez
Elementary School to turn the redevelopment of
the school into an interactive learning experience.
By linking construction activity with the school’s
media programme, students built confidence,
curiosity and communication skills while
following the building progress.
Creating value
In the UK, Balfour Beatty continues to use
theNational TOMs framework to measure and
report social value to a consistent and recognised
standard. In 2025, across our UK projects,
wedelivered over £1.012 billion of social value,
reflecting the scale of our contribution to
localeconomies, skills development and
community wellbeing.
GOVERNMENTS
Governments set the policy and legislative
context in which we operate and are also
valued customers across our chosen
geographies.
2025 engagement examples
@ During 2025, we engaged with the UK
Government to provide evidence-led insight on
priority infrastructure topics, including planning
reform, the energy transition, nuclear readiness,
defence infrastructure and infrastructure
delivery capability. This included targeted
engagement with ministers, officials and
parliamentarians on the Planning and Infrastructure
Act and the Great British Railways Bill, alongside
formal consultation responses and parliamentary
briefings on infrastructure delivery, skills
andproductivity.
@ We hosted an immersive parliamentary
showcase on nuclear capability, centred on the
Sizewell C programme. This brought together
MPs and officials to demonstrate UK delivery
expertise, supply chain readiness and the scale
of civil engineering capability required to deliver
nationally significant nuclear infrastructure.
£1.012bn
social value delivered in the UK
Above: Steve Tarr, Balfour Beatty’s Divisional CEO, hosted a
discussion with the former Deputy Prime Minister at the UK Real
Estate Investment & Infrastructure Forum (UKREiiF).
Scan or click to watch the behind-the-scenes
interview with CésarE. Chávez Intermediate
and the project team.
Balfour Beatty plc | Annual Report and Accounts 2025
23
Strategic report Governance Financial statements Other information
OPERATIONAL REVIEWOPERATIONAL REVIEW
Strong
performance
across a
diverse
portfolio
Throughout this report, the
Grouphas presented financial
performance measures which
areconsidered most relevant
toBalfour Beatty and are used
tomanage the Group’s performance.
These financial performance measures are
chosen to provide a balanced view of the Group’s
operations and are considered useful to investors
as these measures provide relevant information
on the Group’s past or future performance,
position or cash flows. These financial performance
measures are also aligned to measures used
internally to assess business performance in the
Group’s budgeting process and when determining
compensation. An explanation of the Group’s
financial performance measures and appropriate
reconciliations to its statutory measures are
provided in the Measuring Our Financial
Performance section. Non-underlying items are
the cause of the differences between underlying
and statutory profitability. Additionally, revenue
includes the Group’s share of revenue of joint
ventures andassociates.
CONSTRUCTION SERVICES
Financial review
Revenue at £8,711 million was up 6%
(2024:£8,199 million), an 8% increase at CER,
with higher volumes in UK Construction and US
Construction offset by a reduction at Gammon.
Underlying profit from operations increased to
£171 million (2024: £159 million) due to improved
profitability in UK Construction, partially offset
byreduced profitability in US Construction and
alower Gammon contribution due to reduced
volumes. Statutory PFO for the year was
£182million (2024: £87 million). The order book
increased 23% (29% at CER) in the year to
£18.7billion (2024: £15.2 billion), largely due to
new power generation orders in UK Construction.
UK Construction: Revenue in UK
Constructionincreased by 3% to £3,112 million
(2024£3,011million) driven largely by higher
volumes in the energy sector.
UK Construction achieved its long-standing PFO
margin target of 3% in the year, with strong
project delivery, the improved risk profile of its
portfolio and a one-off £11 million insurance
recovery contributing to underlying profit from
operations of £110 million (2024: £81 million).
This represents a 3.5% PFO margin (2024:2.7%),
Construction Services
2025 2024
Revenue
1
£m
PFO
£m
Order book
1
£bn
Revenue
1
£m
PFO
£m
Order book
1
£bn
UK Construction 3,112 110 8.9 3,011 81 6.2
US Construction 4,509 25 7.8 3,638 40 7.1
Gammon 1,090 36 2.0 1,550 38 1.9
Underlying
2
8,711 171 18.7 8,199 159 15.2
Non-underlying – 11 – – (72) –
Total 8,711 182 18.7 8,19 9 87 15.2
1 Including share of joint ventures and associates.
2 Before non-underlying items (Note 9).
A reconciliation of the Group’s performance measures to its statutory results is provided in the Measuring our financial performance section.
REVENUE
1
£ 8,711m
2024: £8,199m
STATUTORY REVENUE
£7,589m
2024: £6,630m
UNDERLYING PROFIT FROM OPERATIONS
£171m
2024: £159m
STATUTORY PROFIT FROM OPERATIONS
£182m
2024: £87m
ORDER BOOK
1
£18.7bn
2024: £15.2bn
1 Including share point of ventures and associates.
which is 3.2% when excluding the insurance
recovery, and demonstrates good progress in the
division’s margin expansion efforts, with further
improvement expected in 2026.
The UK Construction order book grew by 44%
in2025 to £8.9 billion (2024: £6.2 billion), driven
largely by the work won at Sizewell C nuclear
power station and the Net Zero Teesside carbon
capture project. The order book remains relatively
low risk compared to historic norms, with 88%
oforders contracted on target cost or cost-plus
contract terms (2024: 79%). Additionally, at year
end, 84% (2024: 92%) of the order book was
with public sector and regulated industry customers,
and more than half of the remaining 16% related
to Net Zero Teesside, where the ultimate client is
a joint venture between BP and Equinor.
US Construction: Revenue in US Construction
increased by 24% (28% increase at CER) to
£4,509 million (2024: £3,638 million) driven
largely by stronger demand in US Buildings.
Underlying profit from operations for US
Construction reduced by 38% to £25 million
(2024: £40 million) with the cost of schedule
delays at one US Civils highways project in Texas
more than offsetting strong performance from
Balfour Beatty plc | Annual Report and Accounts 2025
24
Strategic report Governance Financial statements Other information
the US Buildings business. Tariffs had a relatively
low impact on the business in the year, and
where incurred, were largely recovered through
pre-existing contract terms. US Construction
PFO is expected to improve in 2026, with the
delayed Civils highway project expected to
complete around the middle of the year.
The US Construction order book increased by 10%
(18% at CER) to £7.8 billion (2024: £7.1 billion)
with increases in both the Buildings and Civils
divisions when measured in dollar terms. Growth
in the US Buildings order book was driven largely
by $750 million of correctional facility work in the
Southeast, increased data centre work and
education orders. US Civils order book growth
was primarily due to an $889 million contract for
the Texas Department to reconstruct a 3.7km
section of Interstate 30 in Dallas County. The
project, scheduled for completion in 2031,
willbedelivered solely by Balfour Beatty and is
reflective of the Group’s capabilities and focus
going forward.
Gammon: The Group’s share of Gammon’s revenue
reduced by 30% (28% at CER) to £1,090 million
(2024: £1,550 million) driven by decreased activity
on major civils projects, as work on the two
major projects at Hong Kong International Airport
moved towards completion through the year.
Although underlying profit decreased to £36 million
(2024: £38 million), Gammon delivered an improved
profit margin of 3.3% (2024: 2.5%), with the
improvement in margin driven by the mix of work
completed across the project portfolio.
The Group’s share of Gammon’s order book
increased by 5% (18% at CER) to £2.0 billion
(2024: £1.9 billion), with new additions including
a commercial development in Tung Chung with
a23-storey office tower, five-storey retail podium
and 20-storey data centre; a commercial and
residential development in Kowloon with six
residential towers; and a five-tower residential
development in Tai Po. Further new orders were
received for work in the Northern Metropolis,
including four nine-storey buildings at the Hong
Kong-Shenzhen Innovation and Technology Park
and civils contracts to prepare land and
deliverengineering infrastructure works for new
development areas. Northern Metropolis projects
now represent 26% of the Gammon order book.
Operational review
UK Construction
Further demand in UK energy and
defencemarkets
Balfour Beatty holds a market-leading position
ina growing UK infrastructure market, with
unmatched scale and vertically integrated
capability for delivering major and regional civils
projects. The market outlook has strengthened
during 2025, with the UK Government launching
a 10-year infrastructure strategy as it looks to
deliver on its objective to stimulate economic
growth by investing in and enabling infrastructure
development. The strategy is supported by the
publication of The Infrastructure Pipeline, which
details the projects to be delivered over the
10-year period, financed by at least £725 billion
of public funding and further material investment
from the private sector. This longer-term approach,
which includes planning reform and the creation
of the National Infrastructure and Service
Transformation Authority (NISTA), brings
improved certainty and clarity for the industry
asa whole, allowing UK contractors and their
suppliers to plan accordingly and invest in
capability. The Government also recognised the
necessity for further investment in UK defence,
which it forecast will create hundreds of thousands
of jobs and contribute to economic growth.
In 2025, Balfour Beatty has continued to target
three strategic growth markets in the UK – energy
transition and security, defence and transport. With
regard to energy, the essential long-term upgrade
to the UK’s energy infrastructure is underway and
the volume of work required to meet the UK’s net
zero ambitions is vast. The Group was successful
in adding two of its long-term power generation
targets to the order book during the year, with a
combined value of over £3.5 billion:
@ In conjunction with its major role in the
ongoing construction of the Hinkley Point C
nuclear power station in Somerset, Balfour
Beatty has been selected as one of three
contractors to deliver the construction of the
new Sizewell C nuclear power station in
Suffolk. In June, Balfour Beatty signed the
Programme Alliance Agreement in partnership
with Laing O’Rourke and Bouygues Travaux
Publics to deliver the main civil works at
Sizewell C, and as a result of the project
reaching financial close in November, around
£3 billion of Sizewell C work is now included
inthe Group’s order book;
@ Following a multi-year bid, including the delivery
of a front-end engineering design (FEED)
study, Balfour Beatty signed an £833 million
contract with Technip Energies to act as the
construction partner for Net Zero Teesside
Power - an onshore power, carbon capture and
compression project that is poised to be the
world’s first gas-fired power station with
carbon capture and storage.
In addition to these successes, the Group,
alongside Technip and GE Vernova, are working
on a further FEED study for a proposed new build
gas-fired power station with carbon capture and
storage for the Connah’s Quay Low Carbon Power
project. The Group also continues to pursue
opportunities in the UK’s emerging small modular
nuclear reactor market, and the UK Construction
division’s civil engineering expertise is expected
to be drawn on further as a result of the ongoing
expansion of power transmission and distribution
volumes within Support Services.
MAJOR MILESTONE ACHIEVED
FOR HS2’S A46 KENILWORTH
BYPASS
Working in close collaboration with HS2
and National Highways, Balfour Beatty
VINCI delivered a major milestone,
successfully sliding a 14,500 tonne
concrete box structure into position to
support the new high speed rail line.
The record breaking structure – Europe’s
heaviest of its kind – was constructed
alongside the existing road and installed in
a precisely executed operation, with the
A46 Kenilworth Bypass reopen to traffic
30 hours ahead of schedule – significantly
minimising disruption for road users.
Scan or click to read more about this
major milestone.
Balfour Beatty plc | Annual Report and Accounts 2025
25
Strategic report Governance Financial statements Other information
CONSTRUCTION SERVICES
CONTINUED
Operational review continued
UK Construction continued
Further demand in UK energy and defence
markets continued
In June, the UK Government released the
Strategic Defence Review, declaring defence as
an engine for growth, which will boost prosperity,
jobs and security for people across the UK and
called for a new partnership with industry, including
improved contract management, faster delivery
and a move to industry-standard construction
methods. This alignment with Balfour Beatty’s
capabilities, and the Group’s experience in
defence infrastructure and high-security
environments, means it is well placed to support
the UK Government’s objectives in this sector.
Balfour Beatty’s approach to growing its UK
defence market share includes winning further
work for both the Defence Infrastructure
Organisation, whose projects tend to be security
classified, and at Defence Nuclear Enterprise
(DNE) sites. In 2025, the Group’s live projects at
DNE sites included the Hub at AWE Aldermaston
and the expansion work at Rolls-Royce’s site in
Raynesway, Derby, needed to meet the growth
in demand from the Ministry of Defence and as a
result of the AUKUS agreement. During the year,
Balfour Beatty was selected by Rolls-Royce for a
second project of works at Raynesway, which
will see the Company deliver the critical nuclear
licensed infrastructure required to support the
client’s manufacture of fissile components for
the Royal Navy’s submarine propulsion systems,
and the new AUKUS submarines. Further major
DNE construction frameworks are currently being
pursued in 2026.
Transport remains an important component of
the UK Government’s growth plans and, while
fiscal headwinds are impacting the volume of
activity in the short term, support for major
infrastructure projects such as the Lower Thames
Crossing road scheme and rail projectssuch as
Northern Powerhouse Rail, theTranspennine
Route Upgrade and East West rail was reaffirmed
in 2025. The Government hasalso publicly
backed the expansion plans for Heathrow Airport.
National Highways’ draft third Road Investment
Strategy (RIS3), which includes £25 billion of
funding over five years and is due tobe finalised
imminently, has an increased focus on maintenance
and renewals rather than new roads while,
outside of HS2, the majority ofUK rail funding
inthe short term is also focused on operating,
maintaining and renewing the core railway.
Given Balfour Beatty’s strong market positions
and range of capabilities in the construction and
maintenance of roads and railways, and its
experience in airport construction, the Group
continues to see UK Transport as a growth area
in the medium term. The Lower Thames Crossing
road scheme, a project which the Group was
awarded £1.2 billion of work for in 2023 but has
yet to start the main works contract, was granted
a further £891 million of public funding in 2025
and NISTA are developing a private finance solution
to fund the project to completion. HS2 will continue
to be a material project for Balfour Beatty for the
foreseeable future, and following a pause caused
by a legal challenge, the c£200 million A57 Link
Roads scheme, delivering two new strategic
highways links between Manchester and Sheffield,
is expected to proceed in 2026. With the Group’s
depth of capabilities across transport construction
and maintenance, including asset management
across regional as well as national infrastructure
projects, Balfour Beatty is well positioned to play
a significant rolein the delivery of the UK
Government’s transport strategy.
Strong operational delivery takes PFO margin
above 3%
In 2025, Balfour Beatty’s UK Construction division
delivered an improved PFO margin for the fifth
year in a row and surpassed its long-standing 3%
margin target. This ongoing margin expansion is
built on a track record of strong operational
delivery and a portfolio of higher-quality and
lower-risk projects, overseen by the Group’s
disciplined and rigorous bidding process.
Balfour Beatty’s ambition to provide industry-leading
project delivery across the UK Construction
portfolio not only drives margin performance, but
also demonstrates the Group’s capabilities and
standards, thereby aiding the pursuit of future
work. This focus on project delivery, alongside
the disciplined bidding and strong client demand,
has contributed to the forward order book growing
by 44% in 2025, while remaining heavily weighted
towards lower-risk contract forms. As such, 88%
of the £8.9 billion order book is contracted on
target cost or cost plus incentivised fee terms,
while the remaining 12% is weighted towards
two-stage fixed-price contracts, which are
inherently lower risk than one-stage fixed-price
arrangements. The Group remains focused on
ensuring that new work is contracted on the
appropriate contractual terms and conditions for
the risk undertaken, in order to protect the
Group’s margin and reduce the loss-making
portion of the project portfolio.
On the UK’s largest infrastructure project, HS2,
Balfour Beatty and its joint venture partners are
delivering the main civil engineering works for the
Area North section and the new station at Old
Oak Common in London. On Area North, the
Balfour Beatty VINCI joint venture completed civil
engineering work on the 1-mile Long Itchington
Wood twin-bore tunnel as well as achieving tunnel
breakthroughs at both bores of the 3.5-mile
Bromford Tunnel. In addition, it successfully
pushed the 4,600-tonne M6 South Viaduct east
deck over the M6, with the final stage achieved
without closing the motorway. AtOld Oak Common,
the Balfour Beatty VINCI SYTRA joint venture has
installed over 70% of the first high-speed platform
slabs and commenced blockwork and mechanical
and electrical module installation. At the new
Hinkley Point C nuclear power station, good
progress continues to be made on the underground
marine works and the 230-tonne triple point shaft
formwork structure was lowered and installed
40metres underground to connect the three
tunnels. The Group is also part of the MEH
Alliance, which is delivering the mechanical,
electrical and HVAC installation at the power
station, with volumes increasing during the year.
The Major Highways team achieved substantial
completion of the major improvement scheme at
the interchange between Junction 10 of the M25
and the A3, with traffic management lifted in line
with scheduled expectations. The team also
completed its work on the National Emergency
Area Retrofit scheme, providing emergency
refuge areas on the M25, M3 and M4 and
enhancing safety on the network. Work began
during the year on the M3 Junction 9 scheme,
injoint venture with VolkerFitzpatrick, with
enabling works, piling and earthworks delivered
to facilitate significant structural works in 2026,
while the A63 project is on track to open to traffic
in the first half of 2026, with strong delivery in
2025 on major structural elements, such as the
underpass tunnel and pumping station.
UK Construction operates across the length and
breadth of Great Britain, delivering hundreds of
diverse projects. During 2025, the business installed
the first new bridge over the River Trent in
Nottingham for 65 years, commenced construction
on the new Nairn Academy school in the Scottish
Highlands and delivered restoration works on the
historic Riddings Viaduct, a Victorian structure
that spans the Anglo-Scottish border. Beyond the
new Rolls-Royce and power station contracts,
other projects added to the UK Construction
order book during 2025 included the
OPERATIONAL REVIEW CONTINUED
Balfour Beatty plc | Annual Report and Accounts 2025
26
Strategic report Governance Financial statements Other information
DunardCentre, Edinburgh’s first purpose-built
concert hall in over a century, and the South East
Pier Extension at Edinburgh Airport. Various
additional contracts, including new flood and
coastal defences in Suffolk and the South
Wokingham Distributor Road in Berkshire, were
awarded to Balfour Beatty through the SCAPE
Civil Engineering frameworks. Through the
Group’s partnership with SCAPE, it has been
helping to shape and strengthen local communities
for the last ten years, and remains contracted as
the sole delivery partner until November 2028.
US Construction
Disciplined approach to US growth
Balfour Beatty’s US Construction division
iscomprised of the US Buildings and US
Civilsbusinesses.
US Buildings is a construction management
business, diversified across geographies and
client sectors, which targets major cities and
urban areas in states with favourable economic
outlooks. The business delivered strong revenue
growth in 2025, demonstrating why it is one of
Balfour Beatty’s four chosen growth markets,
and is considered the lower-risk segment
withinthe division. With most of the projects
undertaken by US Construction contracted on
fixed-price terms, US Buildings utilise the early
issuance of subcontracts and insurance of the
supply chain to mitigate risk.
The US Civils business focuses on highways
projects in Texas and the Carolinas, and on local
rail and civils work in California. In contrast to the
Group’s approach to US buildings, civils contracts
in the US are generally delivered on a self-perform
basis, which on fixed-price arrangements gives
limited scope to mitigate inflation and schedule
risk. As a result, the Group remains cautious in
its approach to complex civils contracts in the US
and has reduced its exposure to the sector in
recent years, with 2025 revenue down by nearly
30% compared to 2023. Civils bidding is now
focused on projects that closely align to the
business’ core capabilities, with all major new
contracts in the last three years being in the
roadsector.
Strong revenue growth following period of
order book expansion
Balfour Beatty’s growth engine in the US
continues to be its buildings business, which
increased revenue by 29% (33% at CER) in 2025
and contributed 91% of US Construction
revenues (2024: 87%) following a strong period
of orders that began in the second half of 2024.
The business continued to win work at a similar
rate throughout 2025 and during the 18-month
period preceding year end, the order book grew
by 26% in local currency, driven by two key
factors: an organic growth strategy coupled with
falling interest rates.
Having identified the opportunity for growth in
2023, based on the strength of some core
markets, including aviation, leisure, education
and government, combined with the impact of a
more settled economy, the Group put to work its
two-pronged organic growth strategy to add
further diversification to its regional businesses.
The Group opened new offices, targeting additional
cities in states with existing Balfour Beatty offices,
and broadened the end-markets served in some
regions where the business was already active.
The new office locations are prospering and
contributing well to the growth in revenue and
order book. In Jacksonville, Florida, the team is
constructing a new terminal at Jacksonville
International Airport and delivering work for the
Transportation Authority, while in Sacramento,
California, the team is also working at the local
airport and has completed construction of the new
Cesar Chavez Elementary School. The Charleston
office in South Carolina has recently finished
construction of a senior living facility on Kiawah
Island and, in Savannah, Georgia, the team has
started construction of a local elementary school.
Given the success of the geographic expansion,
the Group opened a further new branch in 2025 in
El Centro, California, and will continue to monitor
further opportunities.
By broadening the regions in which it serves
certain end-markets, the US Buildings business
is further utilising its in-house expertise and
long-term customer relationships to drive organic
growth, with success in various sectors. In the
US data centre market, which is expanding at
pace, Balfour Beatty has strong recent history
ofdelivering projects in the Northwest for major
tech companies. During 2025, Balfour Beatty
hasworked with these customers to discuss
data centre opportunities outside of its core
Northwest market, which has resulted in the
Group being selected for a project in Virginia,
while projects in other new states are being
pursued. In aviation, in addition to the work in
Jacksonville and Sacramento, the business is
delivering projects at two airports in North Carolina
and has identified a strong pipeline of new
projects coming to market in the next three years
that closely match the Group’s experience and
capabilities. The Group has also seen further
revenue growth from its geographical expansion
of its theme park, correctional facility and student
accommodation project portfolios in the year.
Given the breadth of geographies and client
sectors served by Balfour Beatty’s US Buildings
portfolio, the overall business is somewhat
protected from sector and economic volatility.
One factor that did impact demand in the past
was the post-pandemic rise in interest rates, as
the increased cost of financing projects led to
delays in some projects being approved. Since
interest rates first started to drop in Q3 2024,
demand in the US buildings market has reacted
positively. This, combined with the success of
the geographic and sector expansion, has
contributed to the business consistently adding
around $3 billion of new contracts to the order
book every six months.
ENHANCING CONNECTIVITY
ONINTERSTATE 30 IN
DALLAS,TEXAS
Working in partnership with the Texas
Department of Transportation, Balfour Beatty
has been awarded an US$889 million
contract to reconstruct a 3.7km stretch of
Interstate 30 through Dallas County.
The project will double the number of
general purpose lanes from six to 12 and
deliver nine new crossings, enhancing
connectivity between I-30 the Southern
Gateway, the I-35E Lowest Stemmons and
The Horseshoe, all of which Balfour Beatty
has successfully completed for Texas
Department of Transportation over the last
five years.
Balfour Beatty plc | Annual Report and Accounts 2025
27
Strategic report Governance Financial statements Other information
CONSTRUCTION SERVICES
CONTINUED
Operational review continued
US Construction continued
High delivery standards maintained across
USBuildings portfolio
During the year, progress has been made
onsignificant buildings projects including:
@ The 17-storey, 800-guestroom, Grand Hyatt
Miami Beach hotel in Florida;
@ The Marine Corps Recruit Depot San Diego
Recruit Mess Hall in California;
@ A social services campus for The Salvation
Army of North Texas Dallas;
@ The Portals IV 356-unit residential project
inWashington DC;
@ Three transformative library projects for
Multnomah County in Oregon, with one new
build and two major expansions;
@ Completion of the Gipson Play Plaza in North
Carolina, which is now the largest adventure
playground in the Southeast;
@ Completion of The Charles, a premier
multifamily development located in
Charleston’s waterfront district.
US Civils performance impacted by
delaysonTexas highways project
The US Civils business continued to pivot
towards a more concentrated portfolio of
projects in 2025, with a heavier weighting of
work delivered in highways and bridges, which
have historically been profitable activities for the
Group. This represented 67% of revenue in 2025
compared to 55% the year before, driven by both
an increase in highways volumes and less rail
activity. The performance of the division was
negatively impacted during the year by cost
overruns and schedule delays on a single joint
venture highways project in Texas, which
commenced in 2019 and is due to finish in
mid-2026. As to be expected, the Group is
pursuing cost recoveries.
US Civils’ focus on delivering highways projects
for long-term customers has driven order book
growth of 53% in 2025 and the division has
taken further steps to de-risk project contracting
and execution. New orders awarded in the year,
such as an $889 million contract with the Texas
Department of Transportation to reconstruct a
3.7km section of Interstate 30 in Dallas County
and a $260 million share of a contract with the
South Carolina Department of Transportation to
replace ageing bridges over Lake Marion, are
reflective of the Group’s capabilities and focus
going forward. The Group remains confident that
US highways will be a profitable activity for the
Group in the medium term.
Gammon
Strong positions in Hong Kong and Singapore
Gammon, Balfour Beatty’s 50:50 joint venture
with Jardine Matheson based in Hong Kong,
hasa local reputation for delivering high-quality
projects in Southeast Asia. The Hong Kong
construction sector remains positive during
adifficult fiscal period for the region, with
Government commitments to invest in
infrastructure projects, and in particular to
accelerate the development of the Northern
Metropolis. Demand remained strong in Singapore,
particularly for commercial and tourism-related
projects, and local orders comprise 14% of
Gammon’s order book at year end.
Gammon continues to have a strong share of
both the buildings and civils markets in Hong
Kong. In buildings, the focus is on the use of
Design for Manufacture and Assembly (DfMA)
and modular construction to improve productivity
and efficiency and expanding the customer base
on a selective basis. In civils, the strategy is to
leverage engineering excellence, with a key area
of future work likely to be from significant
infrastructure programmes in Hong Kong and
inSingapore.
During 2025, Gammon completed the new coach
hall at Hong Kong International Airport and made
strong progress towards completion of the
newTerminal 2 departure facilities, which are
scheduled to open in March 2026. The business
also completed its work on the Central Kowloon
Route, a major three-lane road, where it delivered
major work packages covering critical tunnel
infrastructure, complex electrical and mechanical
systems and ventilation buildings. The Hong
Kong buildings team completed the construction
of One Causeway Bay, an iconic development on
the Victoria Harbour, and celebrated the topping
out of the Hong Kong Housing Society’s
Subsidised Sale Flats Project in Kai Tak, which
comprises two 40-storey residential towers.
In Singapore, Gammon made good progress
onprojects including the Ang Mo Kiu Station,
where the business is responsible for the design,
construction and tunnelling works at the
interchange station, and the Global Switch
Singapore Data Centre, where the team is
replacing the existing cooling systems.
TRANSFORMING HONG KONG
INTERNATIONAL AIRPORT: THE
TERMINAL 2 EXPANSION
Gammon, is delivering the major expansion
of Terminal 2 at Hong Kong International
Airport, a HK$12.88 billion scheme that
forms part of the airport’s transformative
Three Runway System project.
The project includes the expansion of
the main terminal building, new annexe
structures, interconnecting bridges,
significant landside transport upgrades
andadvanced airport systems – all designed
to support arrival and departure operations.
This landmark project showcases the
team’s commitment to engineering
excellence and innovative construction
solutions, reinforcing Hong Kong
International Airport’s position as a
world-class global aviation hub for
generations to come.
OPERATIONAL REVIEW CONTINUED
Balfour Beatty plc | Annual Report and Accounts 2025
28
Strategic report Governance Financial statements Other information
SUPPORT SERVICES
REVENUE
1
£1,427m
2024: £1,210m
STATUTORY REVENUE
£1,427m
2024: £1,210m
UNDERLYING PROFIT FROM OPERATIONS
£122m
2024: £93m
STATUTORY PROFIT FROM OPERATIONS
£145m
2024: £93m
ORDER BOOK
1
£4bn
2024: £3.2bn
1 Including share point of ventures and associates.
Financial review
The Support Services business provides power,
plant, road and rail maintenance services and is
characterised by profitable recurring revenues
underpinned by long-term frameworks.
Support Services revenue increased by 18%
to£1,427 million (2024: £1,210 million) due
tohigher power transmission and distribution
volumes, with power revenues nearly doubling
since 2023. Underlying profit from operations
increased to £122 million (2024: £93 million), as
the growth in revenue was largely related to the
disciplined delivery of higher-margin activities.
This resulted in PFO margin of 8.5% in the year
(2024: 7.7%), which is above the targeted 6-8%
PFO margin range and represents outstanding
performance in the segment. Statutory profit for
the year was £145 million (2024: £93 million).
Support Services PFO is expected to increase
in2026, with further growth in power volumes
and PFO margin remaining above 8%.
The Support Services order book increased
by25% to £4.0 billion (2024: £3.2 billion) driven
by new power transmission and distribution
contacts and a strong period of work winning
inthe Rail business.
Support Services
2025 2024
Order book
1
(£bn) 4.0 3.2
Revenue
1
(£m) 1,427 1,210
Profit from
operations
2
(£m) 122 93
Non-underlying
items (£m) 23 –
Statutory profit from
operations (£m) 145 93
1 Including share of joint ventures and associates.
2 Before non-underlying items (Note 9).
A reconciliation of the Group’s performance measures to its
statutory results is provided in the Measuring our financial
performance section.
Operational review
Accelerating growth in power transmission
and distribution market
The power transmission and distribution market
in the UK, within which Balfour Beatty holds
market-leading scale, has continued on a rapid
trajectory of growth, which is expected to continue
in the medium term. In 2025, Ofgem confirmed
its final RIIO-T3 determinations and committed
an initial £10 billion of funding for electricity
network upgrades in the price control period
(2026-2031) for the three transmission owners:
National Grid, Scottish and Southern Electricity
Networks (SSEN) and Scottish Power Energy
Networks (SPEN). The regulator recognised that
this was the first portion of what its own forecasts
suggest could be over £70 billion of funding in
the period to 2031. A large portion of this will be
through the Accelerated Strategic Transmission
Investment (ASTI) programme for major new
infrastructure in which Balfour Beatty is playing
aleading role. The Group is also seeing major
demand as a result of new connections to the
grid, through new renewable generation, battery
storage, industrial clients and data centres, which
in turn requires the transmission owners to invest
in their networks.
Balfour Beatty’s market-leading position in
theUK power transmission and distribution
construction industry is built not only on scale,
but also a unique end-to-end offering, including
design, steel fabrication, panel manufacturing,
ground engineering, all aspects of transmission
and distribution construction, and commissioning.
As well as continued growth in its core disciplines
of overhead lines, underground cabling and
substations, the Group has also entered the
growing converter station market, where it is
ideally placed to deliver civil engineering works.
The converter station strategy is aligned to that
of the rest of the Power business; focusing
onwork for the regulated transmission and
distribution network owners, where the Group
has existing long-term framework positions and
strong technical knowledge and experience. The
business was selected for various schemes and
frameworks during 2025 and the order book
increased by 38%. Progress with the three key
customers included:
@ Awarded two places on National Grid’s High
Voltage Direct Current supply chain framework,
to deliver both the civil engineering works for
future converter station schemes, as well as
the associated onshore underground cabling
works. The five-year framework has an option
to extend for a further three years;
@ Appointed by National Grid as the regional
delivery partner for the North East of England
as part of its £8 billion Electricity Transmission
Partnership, designed to accelerate the
delivery of vital substation infrastructure;
@ Awarded a place on SPEN’s transmission
business’ Strategic Agreement for Overhead
Line Works framework. The five-year framework
has an option to extend for a further five years;
@ Planning consent granted for the £690 million
Skye 132kV Reinforcement project for
SSEN,which also placed a major order for
BalfourBeatty’s steel fabrication facility to
manufacture towers for the ASTI programme,
with manufacture and testing of a new tower
type underway.
As this market continues to expand at pace,
thebusiness continues to grow its capacity and
capability. Over 500 people joined the Power
T&D business in 2025, taking new recruits to
over 1,000 in two years. Core to the business’
growth strategy is the utilisation of Balfour
Beatty’s full UK offering. By leveraging the scale
and depth of those capabilities, the business can
add value for its long-term customers, while
bringing new work to other parts of the Group.
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