Results round-up: Balfour Beatty, One Savings Bank

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.

One Savings Bank

One Savings Bank hiked its dividend 21% as it achieved a strong income statement and balance sheet growth while delivering a return on equity of 29%.

The challenger bank delivered a 29% return on equity despite the impact of the bank corporation tax surcharge and an improvement in the capital ratio to 13.3%.

Underlying loan book growth jumped to 20% from 10% in the first half and 13% after nine months, with net loans and advances swelling 16% to £5.9bn and gross originations up by 28% to £2.3bn.

The net interest margin increased to 314 basis points from 309bps a year before, helping lift underlying PBT 29% to £137.0m.

Statutory PBT leapt 55% to £163.1m, reflecting a £34.7m exceptional gain on the disposal of its interest in the Rochester 1 securitisation vehicle of and an exceptional loss of £9.8m related to hedged legacy interest rate swap cancellations.

Underlying basic earnings per share increased 20% to 41.7p, beating consensus forecasts by 4%, and a final dividend of 7.6p per share was proposed that gives a full year dividend of 10.5p.

"We have once again met or exceeded all of the financial objectives we set at IPO despite a number of regulatory and tax changes," said chief executive Andy Golding, highlighting that the loan book growth from One Savings' specialist lending brands such as Kent Reliance demonstrated the strength of its lending model.

Looking forward he added: "Following this strong performance in 2016, we entered 2017 with a strong pipeline of new business and are seeing very strong application levels in our core businesses.

"We expect to deliver net loan book growth in the mid-teens in 2017, whilst keeping NIM and cost to income ratio broadly flat."

The Stamp Duty increase for buy-to-let purchases introduced last April has been absorbed by the market with "little long-term impact" for OSB's target audience of professional landlords, with new BTL underwriting standards providing the group a competitive advantage as landlords have begun to increasingly borrow via limited companies, which is one of its specialities.