Balfour Beatty Lifts Profit Forecast on Strong US and UK Demand, Shares Soar
Profit Forecast and Market Performance
By Simone Lobo
Aug 12 (Reuters) - British construction group Balfour Beatty raised its annual operating profit forecast on Wednesday, citing strong demand for infrastructure projects in the United States and UK, sending its shares up over 12%.
Key Financial Highlights
Here are some details:
Profit Growth Outlook
• The group now expects low-double-digit percentage growth in profit from operations in fiscal 2026, above the high-single-digit percentage growth previously forecast, as rising demand for building construction in the U.S. and power stations in the UK bolstered its first half.
Share Price Performance
• Shares of the company rose to as much as 973 pence, an all-time high.
Underlying Profit and Operations
• Balfour Beatty, which undertakes public and private sector projects spanning power, transportation and defence, reported underlying profit from operations of £153 million ($206.63 million) for the half year ended June 26, compared with £108 million a year earlier.
Industry and Market Factors
Impact of Rising Energy Prices
• While rising energy prices in the wake of the Iran war have driven up construction costs, Balfour's contract clauses have allowed it to pass them on to clients, CEO Philip Hoare told Reuters.
CEO Commentary
• "Increasing costs may mean that projects in the future are potentially delayed or have an extended duration as clients seek the funding they need to be able to complete the project. But at this time we're not seeing impact on projects or programmes," he said.
Government Investment and Order Book
• The British government has invested heavily to upgrade power grids, which benefits infrastructure companies such as Balfour Beatty.
• Resilient demand at the company's U.S. buildings portfolio, which comprises residential, institutional and commercial buildings, also supported an order book worth £23 billion at the end of the first half.
Additional Information
($1 = 0.7405 pounds)
(Reporting by Simone Lobo in Bengaluru; Editing by Subhranshu Sahu and Mrigank Dhaniwala)
