Balfour set to hit margins milestone

Contractor Balfour Beatty expects to deliver industry standard margins on all earnings for the second half of 2018 – a key target in its transformation programme.

The firm’s trading update said group performance for the year will be above previous expectations as a result of an additional Infrastructure Investments sale in December. The company expects to complete a partial sale of 80% of its Edinburgh University student accommodation project for £24m this month.

Ensuring that all earnings had achieved industry standard margins was a key target in the Build to Last transformation programme initiated by chief executive Leo Quinn and represents further progress on phase two of that initiative.

Earlier this year, Balfour Beatty Investments chief executive Ian Rylatt told Partnerships Bulletin that the company was on track to hit that milestone in the second half of 2018, with the third stage of the Build to Last programme focusing on “market-leading strengths and performance”.

Reflecting on the positive figures in the latest trading update, Quinn said: “The actions we have taken since the start of 2015 have created a strong foundation for the future. We have consistently invested in our capabilities, systems and leadership while de-risking the business, strengthening the balance sheet and selectively building the order book.”

Meanwhile, the firm also confirmed that the Aberdeen Western Peripheral Route project, which has suffered a series of setbacks since Carillion - as one of the partners - collapsed at the start of the year, is expected to be complete by the end of 2018. Balfour said the construction joint venture, which includes Galliford Try, is "continuing its dialogue with Transport Scotland on a commercial agreement in relation to associated claims".