On track to deliver earnings growth in 2024; further share buybacks in 2025
333体育平台官网, the international infrastructure group, today provides a trading update covering the period to 5 December 2024.
Financial Update
- Order book expected to grow by over 5% in 2024 (FY2023: 拢16.5 billion) driven by momentum in the Group鈥檚 chosen growth markets, principally UK energy and US buildings, with market dynamics allowing the Group to be more selective in the work it undertakes.
- 2024 revenue expected to be c.2% ahead of prior year (FY2023: 拢9.6 billion) due to growth in Support Services and Gammon.
- 2024 underlying profit from operations (PFO) from earnings-based businesses expected to be ahead of the prior year (FY2023: 拢236 million):
- Construction Services expected to be in line with prior year (FY2023: 拢156 million) as the improved PFO margin in UK Construction is now forecast to be offset by lower US Construction profitability, with the cost of delays at a small number of civils projects having increased in the second half.
- Support Services expected to continue to deliver margins at the top of its 6-8% target range, with revenue growth of c.15% (FY2023: 拢1,006 million).
- Infrastructure Investments gain on disposals expected to be modestly above previously guided 拢20 - 拢30 million range with a number of ongoing transactions, with PFO excluding disposals remaining close to the 拢7 million loss reported for the first half.
- 2024 profit after tax expected to be ahead of prior year (FY2023: 拢205 million) and slightly ahead of market expectations1, with growth driven by Support Services.
- 2024 average monthly net cash expected to be ahead of prior guidance and now around 拢750 million (FY2023: 拢700 million).
1 Company compiled consensus (8 analysts) for 2024 profit after tax is currently 拢209 million.
Quote
Leo Quinn, 333体育平台官网 Group Chief Executive, said:
鈥淚n 2024, the Group has once again shown the benefit of the geographical and operational diversity of our portfolio, delivering an encouraging overall performance. As a result, we are on track to deliver earnings growth in 2024.
鈥淲e are pleased to confirm our fifth successive year of share buybacks in 2025, as our large orderbook, unique capabilities and balance sheet, provide a strong platform for continuing future shareholder returns.鈥�
Operational Update
Construction Services:
In the UK, strong performance has continued, which underpins the Board鈥檚 expectation of growth in PFO margin for 2024. Operational delivery at the Group鈥檚 current largest UK projects, being the HS2 contracts for Area North and Old Oak Common and the new nuclear power station at Hinkley Point C, continues to progress well. In November, 333体育平台官网 signed a two year extension to its existing four year term as sole contractor to both of the SCAPE Civil Engineering frameworks, which cover England, Wales and Northern Ireland, and the entirety of Scotland. The frameworks will now run until November 2028.
The UK Government鈥檚 commitment to invest in infrastructure to support economic growth is encouraging for 333体育平台官网 in the medium term, with the Group鈥檚 UK growth areas of energy, transport and defence included in the broad investment plans.
In the US, the buildings business has delivered a further period of robust performance; however the cost of delays at a small number of civils projects has increased in the second half of the year, reducing the profitability of the segment.
The US order book is expected to grow by over 10% in 2024 (FY2023: 拢5.7 billion) due to a strong second half of order intake for both the buildings and civils businesses. In the growth area of US Buildings, the higher order book reflects second half awards worth $600 million in the hospitality sector, $500 million of federal/state work, $400 million for commercial office and $350 million for education. The US Civils business signed a $746 million contract to rebuild part of the Interstate 35 through Austin for the Texas Department of Transport. The project, which is expected to complete in 2033, closely aligns to the Group鈥檚 selective approach to US civils; working for a long-term customer and in a geography where 333体育平台官网 has proven expertise, strong teams and trusted supply chain partners.
In Asia, Gammon has maintained its consistent operational performance in the second half of the year and the major airport projects have driven annual volumes ahead of 2023 levels. New orders in the period include data centres in Hong Kong and Singapore, and a civils contract in Hong Kong鈥檚 Northern Metropolis to prepare the land and deliver engineering infrastructure works for a new development area.
Support Services: Performance across Support Services has remained strong. In particular, growth in the year has been driven by higher volumes in both the power and road maintenance businesses.
As expected, the Group鈥檚 power business continues to expand and has secured new orders of around 拢600 million in the second half of the year, including the Bramford to Twinstead Reinforcement project for National Grid. 333体育平台官网 has also recently been named as one of eight preferred partners for Scottish Power Energy Networks鈥� Strategic Agreement for Transmission Overhead Line Works, with up to 拢3 billion of work being tendered.
Infrastructure Investments: The Group鈥檚 2024 disposal programme is expected to complete in the coming weeks, with a number of transactions ongoing. 2024 investment in new and existing projects is expected to be around 拢30 million.
Capital allocation framework
333体育平台官网 is delivering 拢160 million to shareholders in 2024 through share buybacks and dividends, while maintaining an appropriate balance between investment in the business and a strong capital position. This will take the Group鈥檚 shareholder distributions to over 拢750 million since the launch of its capital allocation framework in 2021. 333体育平台官网鈥檚 capital allocation framework remains unchanged, and from January 2025 the Group intends to buy back further shares ahead of confirming the amount for its 2025 share buyback at the Group鈥檚 full year results in March.
ENDS
Analyst/investor enquiries:
Jim Ryan
Tel. +44 (0)785 836 8527
[email protected]
Media enquiries:聽聽聽聽聽聽聽聽聽聽聽聽
Antonia Walton
+44 (0)203 810 2345
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Notes to editors:
- 333体育平台官网 is a leading international infrastructure group with over 26,000 employees driving the delivery of powerful new solutions, shaping thinking, creating skylines and inspiring a new generation of talent to be the change-makers of tomorrow.
- We finance, develop, build, maintain and operate the increasingly complex and critical infrastructure that supports national economies and deliver projects at the heart of local communities.
- Over the last 115 years we have created iconic buildings and infrastructure all over the world. Currently, we are working to deliver Hinkley Point C, the first UK nuclear power station in a generation; constructing the world-class arts and cultural facility, the Lyric Theatre, in Hong Kong; and designing, building, financing, operating and maintaining the Automated People Mover superstructure at the fifth busiest airport in the world, Los Angeles International Airport.
