Balfour Beatty profits jump, fueled by US infrastructure wins

Dive Brief:

London-based contractor Balfour Beatty posted increased sales and profits in its 2022 full-year earnings report last month and highlighted the benefits that selective bidding and the U.S. Infrastructure Investment and Jobs Act have had on the business.
The contractor posted 8.9 billion pounds ($11.1 billion) in revenue through 2022, an 8% increase from 2021’s 8.3 billion pounds in revenue. In addition, the company posted 287 million pounds in pre-tax profit, up from 87 million pounds in 2021.
Backlog was also a key focus for the contractor — it posted a 17.4 billion pound order book on the year, up 8% from 16.1 billion pounds the year prior. Balfour Beatty Group Chief Executive Leo Quinn noted during an investor call that projects were not being canceled by owners, only delayed or pushed out.

Dive Insight:

Balfour Beatty’s fiscal results follow the company’s December predictions that its financial performance would be better than anticipated, and even the adjusted guidance undershot marks in revenue and backlog.

Quinn said that the company had a “very disciplined approach to the market,” in regard to the types of projects it is pursuing.

“We want to make sure that we're actually investing in things that we're pretty confident we can get a return on, so a nice business and very nice returns,” Quinn said.

In line with the positive news, U.S. and U.K. segments posted improvements on the year — U.S. construction posted 3.7 billion pounds in revenue, up from 3.3 billion pounds last year. Antonia Walton, Balfour Beatty’s head of corporate communications, told Construction Dive that the improvements were largely the result of a strengthening U.S. dollar throughout 2022.

The U.K. construction segment posted 2.8 billion pounds in revenue in 2022, up from 2.6 billion pounds last year. However, more notable is the U.K. segment’s jump in profitability, up to 59 million pounds in profit through 2022 — a stark contrast from 2021’s loss of 2 million pounds.

Balfour Beatty CFO Phil Harrison said during the company’s 2021 full-year results call that last year’s loss was due to performance issues at three private residential projects in central London.

Walton told Construction Dive that the U.K. improvements were the result of “increased volumes” at HS2, a massive high-speed railway project that will run throughout the commonwealth, and Hinkley Point C, a large nuclear power plant the company is building in Avonmouth, England.

In the U.S., recent large projects the company has worked on include: