Balfour Beatty’s Share Price Rallied 10.8% on Its FY 2023 Results

The Balfour Beatty plc (LON: BBY) share price rallied 10.8% after releasing its financial results for the year ended 31 December 2023. The company reported a steady increase in its financial metrics, driven by the performance of its earnings-based sectors. Total revenue rose by 7%, reaching £9.6 billion compared to the previous year's £8.9 billion.

Profit from operations in these sectors increased modestly by 2% to £236 million, up from £232 million in the prior year. However, profit before tax declined 10%, primarily due to reduced profits from investment sales, which aligned with forecasts. 

Additionally, earnings per share decreased by 21% to 37.3p, affected by a higher tax charge of £55 million after a £56 million tax credit in the preceding year. Despite economic uncertainties, the company maintained its resilience, supported by its diverse portfolio. 

Profits from Construction Services grew by 5% to £156 million from £149 million in 2022. Support Services maintained a profit margin of 8.0%, remaining at the higher end of the 6-8% target range, though slightly down from 8.4% the year before. 

The valuation of Infrastructure Investments decreased to £1.2 billion from £1.3 billion, influenced by changes in exchange and discount rates. The company also marked its sixth year of continual improvement in employee engagement.

Shareholder returns are set to increase, backed by solid cash generation and financial stability. A proposed 10% hike in the full-year dividend will raise it to 11.5 pence per share, up from 10.5 pence. Additionally, the company has launched a £100 million share buyback program for 2024. 

The company anticipates a total cash return of approximately £160 million, down from £208 million in 2023. The average net cash is projected at £700 million, a slight decrease from £804 million the previous year.

The firm’s strategic emphasis on executing its substantial order book, valued at £16.5 billion, down from £17.4 billion, positions it for medium-term growth. 

Leo Quinn, Balfour Beatty’s Group Chief Executive, said: “The Group's reliability and resilience has again delivered a solid performance, with increased revenue and profit from our earnings-based businesses and strong operating cash flow. This success against a challenging economic backdrop is driven by our disciplined contract risk management across a geographically and operationally diversified portfolio.”

Balfour Beatty share price. 

Balfour Beatty's share price rallied 10.79% to trade at 373.15p from Tuesday’s closing price of 336.80p.