Balfour Beatty returns to the black

Infrastructure group Balfour Beatty returned to the black on Thursday, posting statutory full year pre-tax profits of £8m from a loss of £199m.

Underlying pre-tax profits came in at £60m against a loss of £123m in 2015. Shareholders have been rewarded with a 1.8p a share final dividend for a total of 2.7p.

Underlying revenue grew 4% to £8.5bn thanks to the weak pound. At constant exchange rates revenue was down 3%.

The total cash movement in the period resulted in a £10m increase to the group's net cash position, excluding non-recourse net borrowings, to £173m compared with a to a decrease of £56m in 2015.

Statutory profit from operations improved from a loss of £182m to a profit of £15m primarily driven by the increase in underlying profit and a reduction in non-underlying costs.

Hargreaves Lansdown analyst Nicholas Hyett said Balfour appeared to be building momentum after years of "creaking under the strain of loss making historical contracts".

"The self-help phase of the turnaround plan has restored the group to reasonable foundations, with the all-important construction division back in profit in the second half. The strategy now calls for the group to rebuild margins towards something close to industry standard – at around 2% it’s not an overly ambitious target on the face of it, but something Balfour have failed to achieve for some time," he said.

"If the group pulls off its recovery plan it will be another feather in the cap of CEO Leo Quinn, who, having started his career at Balfour Beatty, has already performed minor miracles in returning Qinetiq and De La Rue to something approaching good health. These results suggest he’s well on the way.”