A strong performance by Hong Kong-based construction company Gammon helped boost sales at UK-based civil engineering company Balfour Beatty.
Leo Quinn, Chairman of the Balfour Beatty Group
Balfour Beatty reported a 3% year-on-year increase in revenue to £4.7 billion ($6 billion) for the six months to 28 June 2024. Pre-tax profit for the period rose to £98 million ($125.6 million), up from £97 million ($124.5 million) in the same period last year.
While Balfour Beatty’s US and UK construction operations saw slight revenue declines in the first half of 2024, these were offset by a strong performance from the company’s Gammon joint venture, which reported a 22% increase in revenue to £714 million ($916.5 million), up from £583 million ($748.3 million) in the same period last year.
Balfour Beatty owns 50 percent of Gammon, with the other 50 percent owned by Jardine Matheson. The company said the majority of new orders for the company came from the construction sector, although high interest rates led to a slowdown in private housing construction in Hong Kong.
It added that the outlook for Hong Kong’s construction industry remains positive, with the government committed to expanding railway infrastructure and building key new roads. The company is also expected to benefit from plans to develop more than 3,000 hectares of land as part of the Northern Metropolis project.
The group’s total order book increased slightly in the first half of the year to £16.6 billion (US$21.3 billion).
Leo Quinn, CEO of Balfour Beatty, said: “The Group’s outlook for each of its four selected growth markets – UK energy transition and security, UK transport, UK defence and US buildings – has improved year to date, driven by a combination of successful tenders and improved economic and political stability, particularly in the UK.”
“The new Labour government has committed to growing the UK economy and has highlighted planned investment in energy and transport infrastructure, leveraging private investment, planning reforms and upskilling the UK workforce as key components of its plan to achieve this goal. It has also promised to increase defence spending over time. This development is positive for Balfour Beatty in the medium term.”
Segment analysis of Balfour Beatty’s half-year results to June 28, 2024.
