- U.K. construction firm to pay out 0.9 pence per share
- Company expects new public-sector infrastructure deals
U.K. construction company Balfour Beatty Plc narrowed its first-half loss and restored its dividend as Chief Executive Officer Leo Quinn’s overhaul of the company advanced, lifting its share price.
The company posted a pretax loss of 21 million pounds ($27 million), after a loss of 150 million pounds a year earlier. The shares were up 7.6 percent, the most since November 2014, at 263 pence as of 9:40 a.m. in London.
“We’ve clearly stabilized the business and are beginning to see real benefits,” Quinn said in a telephone interview. “We have much stricter discipline around revenue, cash flow and the risk we are prepared to assume.”
Balfour Beatty said it would resume dividend payments with an interim payout of 0.9 pence per share. Quinn suspended dividend payouts, canceled a share buyback and overhauled the management after taking the helm last year.
Analysts at Numis said in a note that the results suggest “a turning point for the group” and predicted a return to profitability in its U.K. construction business in the second half.
Revenue fell in the first half to 4.1 billion pounds from 4.2 billion pounds a year earlier. Quinn said this was expected as the company is being more selective about projects and is divesting itself of contracts operating at a loss.
Balfour Beatty has worked on U.K. government projects such as London’s Crossrail transit line. Quinn said he was cautious about the effect of Britain’s plan to exit the European Union.
“A lot will depend on the government’s continued support for infrastructure investment,” he said. Planned projects include a new runway at Heathrow or Gatwick airports near London, as well as a high-speed rail line to the north of England.
Balfour Beatty will announce “one or two big infrastructure projects” in the coming weeks that will involve “significant investments by government,” Quinn said.