Balfour Beatty dips to half-year loss on Covid-19

The construction giant posted a £26m pre-tax loss for the first six months of 2020, attributed to the financial impacts of the coronavirus pandemic.

Balfour Beatty reported a £63m profit for the same period of 2019, but the global health crisis and ensuing lockdown of this year have resulted in stalled sites and project delays, hitting the company’s bottom line.

However, the group said its order book had increased by more than 20% year-on-year in the first half of 2020 to £17.5bn, up from £13.2bn in the year-earlier period.

Revenues stood at £4.11bn, up from £3.8bn in the first half of 2019, Balfour Beatty added, in its results statement to the London Stock Exchange today.

Balfour Beatty’s group chief executive Leo Quinn said: “Since the Covid-19 crisis broke, our mission has been to safely manage through it while protecting the group’s strengths. That meant balancing the needs of all our stakeholders.

“We have kept sites open wherever safe to do so, prioritised supply chain payments and supported staff…We have preserved the disciplines, expert capability and financial strength we will need as markets move back to normal and then beyond, driven by fiscal stimulus for infrastructure.”

In the North West, Balfour Beatty is working on the Broadside residential scheme in the New Cross area of Manchester; is due to complete the £400m Manchester Engineering Campus Development at the University of Manchester next April, and is also carrying out highways and landscaping improvements around the Adelphi Quarter in Preston, among other schemes.

The outlook for 2021 will remain in line with 2019 as markets recover. Balfour Beatty said in a trading update in June it was “well positioned” to navigate the financial impact of Covid-19, in part because of its strong order book growth. In its filing, the company said the valuation of its directors’ investments portfolio stayed broadly flat at £1.1bn, compared to £1.2bn in the year-earlier period.

Quinn added: “The financial impacts of COVID-19 are unavoidable; but they will pass. Since the start of the Build to Last [concept], our balance sheet, order book and expert capability are at record levels.

“We look forward with confidence to returning to profitable managed growth, and to delivering ongoing value for all our stakeholders.”

The board aims to re-instate the dividend “as soon as is appropriate”, the statement said.

Balfour Beatty’s share price was down 3.8% on Wednesday morning.