Results for the half-year ended 26 June 2015
12 August 2015
|(£ million unless otherwise specified)||Half-year 2015||Half-year 20144,5|
|(Loss)/profit from operations2(PFO)||(120)||(140)||29||(43)|
|(Loss)/earnings per share2||(19.4p)||(22.0p)||3.2p||(6.2p)|
|Dividends per share||-||5.6p|
|Half-year 2015||Full-year 2014|
|Directors' valuation of Investments portfolio||1,252||1,300|
|Net cash/(borrowings) – recourse||260||219|
|Net cash/(borrowings) – non-recourse||(327)||(445)|
- Order book1,2 stable at £11.3 billion (FY 2014: £11.4 billion).
- Underlying revenue1,2,3 stable at £4,085 million (2014: £4,072 million).
- Total underlying loss3 in the first half of £135 million (2014: profit £37 million). Total loss in the first half of £150 million (2014: £43 million).
- First half included £152 million shortfall, in line with indicated range of July trading update, reflecting historic issues in construction.
- >90% of historic UK problem contracts expected to be at practical or financial completion by end of 2016.
- Strong performance from Infrastructure Investments – Directors’ valuation £1,252 million (FY 2014: £1,300 million) after realising £112 million of disposal proceeds and £37 million in distributions, with £64 million of cash invested.
Build to Last
- Build to Last already delivering: £260 million net cash as at 26 June 2015 (FY 2014: £219 million) - £362 million cash flow improvement half on half (2015: £41 million inflow; 2014: £321 million outflow)
- Actions underway to achieve £100 million of cost out by end of 2016 – annualised savings of £25 million executed in the first half.
- Favourable market trends – strong pipeline of opportunity, embedding ‘Gated Business Lifecycle’ approach to drive governance and control for project bidding and delivery.
Leo Quinn, Group Chief Executive commented: “Six months in, our Build to Last transformation programme is gaining traction throughout the business. We have a new senior leadership team and an organisation re-aligned with key customer sectors. We are on course to meet our 24-month targets for £200 million cash in and £100 million cost out.
“In rising core markets, the Group is continuing to win business on better terms across our operations. In the last few months the awards of contracts or preferred bidder status for three landmark projects – Bergstrom Expressway in Austin Texas, nuclear new build Hinkley Point C power station electrical package and a UK smart motorway package – is a further endorsement of Balfour Beatty’s leading capabilities.
“Inevitably the headline numbers set out the consequences of the historic issues that are now being tackled. However the continuing confidence of our customers in Balfour Beatty’s expertise, the positive response of our people to change, demonstrated by our excellent net cash performance, and the underlying strength of our balance sheet, supported by the Investments portfolio, all reinforce my conviction that over the medium term we can provide our customers, employees and shareholders with superior returns.”
1 including share of joint ventures and associates
2 from continuing operations
3 before non-underlying items (Note 7)
4 re-presented to classify Parsons Brinckerhoff as a discontinued operation; to include results of Rail Germany, which no longer meets the definition of a discontinued operation, as non-underlying items within continuing operations; and to show the results of certain legacy Engineering Services contracts as non-underlying items (Notes 1.9 and 9)
5 restated to correct prior period error relating to the recognition of contract losses in the UK construction business (Note 1.7)
Tel. +44 (0)20 7216 6824
Tel. +44 (0)20 7216 6846
Andrew Grant/David Allchurch
Tel. +44 (0) 207 353 4200
A presentation to analysts and investors will be made at Bank of America Merrill Lynch, 2 King Edward Street, London EC1A 1HQ at 08:30 (UK time) on 12 August 2015. There will be a live webcast of this presentation on www.balfourbeatty.com/webcast