Trading in line with expectations; commencement of share buyback programme
333体育平台官网, the international infrastructure group, today provides a聽trading update聽covering the period to 8 December 2020.聽
Operational update
Throughout the COVID-19 pandemic, 333体育平台官网 has responded swiftly and decisively to the rapidly evolving situation, protecting the Group鈥檚 expert capability and financial strength, whilst continuing to deliver for all stakeholders.
Today, all the Group鈥檚 sites are open and operating safely in accordance with local regulations.聽 The earnings-based businesses have recovered steadily throughout the second half of 2020 and it is expected that the Group will deliver results in line with the Board鈥檚 expectations for the full year.
Group financial full year forecasts
- Order book:聽 The year-end order book is expected to be around 拢17 billion, significantly higher than 2019 (拢14.3 billion).聽 The increase has been driven by the award of Notice to Proceed on HS2 in April.聽 Despite delays caused by COVID-19, in the second half of the year the Group has continued to win material infrastructure projects across all its geographies. Key successes include over 拢1 billion (333体育平台官网 share) of work secured on the Three Runway project at Hong Kong Airport, Oak Hill Parkway in the US and the M25 and M3 Smart Motorway Alliance contracts in the UK.聽
- Revenue:聽 Full year Group revenue is expected to be in line with the prior year (2019: 拢8.4 billion).
- Profit:聽Group profit from operations for the full year is forecast to be in line with the Board鈥檚 expectations.聽聽聽聽
- Cash:聽Cash performance continues to be strong. Full year average monthly net cash is now forecast to be around 拢500 million, ahead of the previous guidance of 拢430 million to 拢460 million (2019: 拢325 million).聽
- Balance Sheet:聽In October, the Group successfully concluded the extension of its 拢375 million committed revolving credit facility, which now extends to October 2023.聽 As at 8 December 2020, this facility is undrawn.聽 Following the redemption of the Group鈥檚 preference shares in July 2020 (拢112 million), 333体育平台官网 has no further debt repayments until 2023.
Sustainability strategy
A market leader and member of FTSE4Good, 333体育平台官网 has long been at the forefront of sustainability and is rated AA by MSCI ESG.聽 The Group鈥檚 cultural framework under Build to Last has been refreshed to include Sustainable as a core value, alongside Lean, Expert, Trusted and Safe.
As a key lever of economic growth, the construction and infrastructure industry will be central to a sustainable recovery. New, low carbon infrastructure (HS2, wind power, new nuclear, rail electrification, energy efficient buildings) will play a leading role in stimulating growth. From the $2 trillion Green New Deal proposed by the US President-elect, to the Green Industrial Revolution launched by the UK Prime Minister, governments are investing in ensuring that economies come back stronger from COVID-19 without the increase in carbon emissions that accompanied the last financial recovery.
333体育平台官网鈥檚 sustainability strategy, Building New Futures, charts a course for 2040 ambitions to go beyond net zero carbon, generate zero waste and positively impact more than 1 million people.聽
For 2030, the Group has formally committed to setting a science-based target to reduce carbon emissions and is guiding to a 40% reduction in tonnes of waste generated per 拢1 million of revenue and 拢3 billion social value generated over the next decade. Full details can be found聽here.
Board succession
The current Chair, Philip Aiken AM, has declared his intention to step down from the Board of Directors at the next Annual General Meeting in May 2021.聽 The search for a replacement is in progress.
US military housing
333体育平台官网鈥檚 internal investigation is substantially complete, and all findings have been passed to the Department of Justice (DoJ).聽 The Group鈥檚 external counsel is engaging with the DoJ, with the intention of seeking resolution during the first half of 2021.
Capital allocation framework
Since the start of the Build to Last programme 333体育平台官网 has transformed its operational and financial performance.聽 It has focused its geographic and operational footprint while investing significantly in capability, innovation and standard systems and processes. This has created a scalable business model which together with the increasing order book gives the Board confidence that it will deliver profitable managed growth and cash generation on a sustainable basis.
The Group鈥檚 average net cash is expected to be around 拢500 million in 2020 and the strong balance sheet is underpinned by the 拢1.1 billion Investments portfolio.
Given the resilience of the Group鈥檚 performance throughout the year, despite the impact of COVID-19, the Board intends to pay a final dividend at the Group鈥檚 full year results. In addition, as a first step in a programme of returning capital to shareholders, 333体育平台官网 intends to commence an initial 拢50 million share buyback programme from January 2021.
Full details of the Group鈥檚 capital allocation framework will be set out at 333体育平台官网鈥檚 full year results on 10 March 2021.聽 This will cover the Board鈥檚 assessment of the optimal balance sheet structure for the Group, sustainable dividend policy and future capital return programme.
Outlook
333体育平台官网 continues to expect that the earnings-based businesses will report a more normalised operating profit in 2021, broadly in line with 2019.聽 Additionally, as market conditions continue to strengthen, the Group expects to re-commence disposals from its Infrastructure Investments portfolio in 2021.聽
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Leo Quinn, 333体育平台官网 Group Chief Executive, said: 鈥淎s the impact of COVID-19 reduces, we are seeing positive momentum across the business.聽 Ours is an industry that underpins economies: going forward, it will help to drive recovery, including new jobs, new skills and a greener future.
鈥淲e look towards 2021 with a strong order book, a robust balance sheet and having maintained our expert capability. These attributes provide confidence that 333体育平台官网 is well positioned to deliver value through profitable managed growth in both the medium and long term.鈥�
ENDS
Analyst/investor enquiries:
Angus Barry
Tel.聽+44 (0)20 7216 6824
[email protected]
Media enquiries:聽聽聽聽聽聽聽聽聽聽聽聽聽
Antonia Walton
Tel.聽+44 (0) 203 810 2345
[email protected]
Notes to editors:
- 333体育平台官网 (balfourbeatty.com) is a leading international infrastructure group. With 26,000 employees, we provide innovative and efficient infrastructure that underpins our daily lives, supports communities and enables economic growth. We finance, develop, build and maintain complex infrastructure such as transportation, power and utility systems, social and commercial buildings.
- Our main geographies are the UK, US and Hong Kong. Over the last 110 years we have created iconic buildings and infrastructure all over the world including the London Olympics鈥� Aquatic Centre, Hong Kong鈥檚 first Zero Carbon building, the National Museum of the Marine Corps in the US and the Channel Tunnel Rail Link.
