Construction business Balfour Beatty (BBY) gained 1.6% to 272.6p as it announced plans for a return to the dividend list at the full-year stage and a £50 million buyback as it lifted guidance on its order book and net cash position.

The year-end order book was expected to be a record £17 billion, significantly higher than 2019’s £14.3 billion thanks to the award of the notice to proceed on HS2 in April.

Balfour Beatty said it had continued to win material infrastructure projects across all its geographies in the second half of the year despite delays caused by Covid-19.

The company said it expected full-year group revenue to be in line with the prior year’s £8.4 billion and profit from operations to be in line with the board's expectations.

NET CASH BUILDING

Full-year average monthly net cash was now forecast to be around £500 million, ahead of the previous guidance of £430 million to £460 million, and above last year’s £325 million, it added.

The company also said that chairman Philip Aiken, would be stepping down at the next annual general meeting in May 2021.

Commenting on the update Numis analyst Jonathan Coubrough said: ‘We view the announcement of an initial £50 million buyback as a signal of the board’s confidence in the group’s outlook across the Services businesses, and that management actions to date have now resulted in surplus net cash.’

Adding that the record order book ‘is consistent with our view that Balfour is a market leader in all key markets, which are characterised by strong fundamentals and desire for major Government investment programmes’.

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Issue Date: 09 Dec 2020