14 August 2013 – interim results
Although the first half results from Balfour Beatty have proved disappointing, these are pretty much in line with expectations. A 3% decline in group revenues to £4.3bn led to a 70% fall in underlying pre-tax profits which fell to £45m (2012: £150m). Earnings per share on the same basis were 66% lower at 6.3p (2012: 18.7p) and the interim dividend was maintained at 5.5p. These results have been adversely affected by a poor performance from UK construction as previously reported and firm action to address this issue and the deterioration in the Australian business are expected to see benefits in the second half allowing full year forecasts to be met. These are for pre-tax profits of £214m and earnings per share of 25p. With the full year dividend likely to be maintained at 14.1p, the shares yield almost 5.7% and we maintain our recommendation of BUY.