Balfour Beatty posts narrower loss for H1, reinstates dividend

FTSE 250 construction group Balfour Beatty surged on Wednesday after saying it has reinstated its dividend and reporting a smaller loss for the half year ended 1 July.

The pre-tax loss for the period narrowed to £21m from £150m the same time a year ago, on revenue of £4.1bn, down a touch from £4.2bn.

The company reinstated it dividend with a 0.9p per share payment in a sign that the turnaround plan under boss Leo Quinn is bearing fruit.

The order book was up 7% at constant exchange rates to £12.4bn.

Chief executive Leo Quinn said: “We are now starting to see tangible benefits from the transformation of Balfour Beatty.

“Eighteen months into the first phase of Build to Last we have delivered our second successive half of underlying profitability and remain on track to achieve our initial targets of £200m cash in: £100m cost out. By concentrating on our selected markets, we are growing our order book within a control environment which ensures that our business decisions lead to sustainable profit and cash growth.”

Numis lifted its recommendation on the stock to ‘buy’ from ‘add’, highlighting a strong cash performance and saying the results suggest a turning point for the group, as illustrated by the reinstatement of an interim dividend.

At 0915 BST, Balfour shares were up 7.6% to 262.90p.