Infrastructure company Balfour Beatty plc (BBY.L) Friday said full-year trading and order book remain in line with its expectations. In a trading update for the year ended December 31, 2009, the company expressed confidence that the range of its operations would make it resilient even in uncertain economic conditions in certain markets.
The company said it benefited from continued expenditure in infrastructure markets in 2009 and finished the year with a strong order book. Balfour Beatty had said in its interim management statement in November that it expected 2009 to be a year of good progress and that ''with the addition of Parsons Brinckerhoff's order book of US$1.95 billion (GBP1.2 billion), the confirmed order book total for the Group is therefore now around GBP 13.7 billion." For the half-year, order book was at GBP 8.3 billion.
The company acquired Parsons Brinckerhoff, a leading professional services company, in late October for US$626 million or about GBP 380 million in cash.
The firm's key infrastructure markets include transportation, social infrastructure, utilities and commercial. The company reports in four segments - Construction services, Professional services, Support services and Infrastructure investments. In 2008, the group revenue was GBP 8.26 billion and order book stood at GBP 12.8 billion.
The Construction Services witnessed a strong 2009 with good performances from the building businesses, especially in the U.S. The businesses reacted quickly to reduce costs where volumes reduced, the infrastructure contractor added.
In Professional Services, the existing business performed well in 2009. However, the overall result will be impacted by the seasonal nature of the profit profile from Parsons Brinckerhoff, Balfour Beatty said. Parsons Brinckerhoff is expected to contribute to full-year 2010, it added.
The Support Services segment performed well in the year and finished the year with a strong future order book. The division comprises the utilities, facilities management, rail renewals and highways maintenance activities of the company. In the previous trading update on November 11, the company had said that as expected, there were reduced volumes in Balfour Beatty Utility Solutions at the end of the regulatory cycle, and that the company expects new orders ahead of the new asset management plan period starting in April 2010.
In Infrastructure Investments, the pipeline of bidding activity in the UK remains strong. In the U.S., the company is looking at certain areas outside military housing where there is demand for financing, designing and constructing infrastructure assets.
Further, Balfour Beatty said integration work has continued to proceed well with the PB, including the integration of Heery in the U.S. and Balfour Beatty Management in the UK.
Average net cash for the second half of the year is over GBP 300 million, Balfour Beatty said today.
Looking ahead, the construction company said, ''The breadth of our portfolio, enhanced by the acquisition of Parsons Brinckerhoff, means our Group is resilient and we remain confident about the prospects for the Group overall, in spite of the economic uncertainties in some of our markets.''
With the UK general election slated for later this year, there are fears that public spending will decrease.
BBY.L is currently trading at 282.40 pence, up 0.40 pence or 0.14%, on 168,134 shares.
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