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Thursday, 13 May 2010 00:00

Balfour Beatty “business performing well and strong forward order book”

Balfour Beatty, the international infrastructure group, has issued a confident Interim Management Statement, covering the period 1 January to 11 May 2010.

The Group said that its trading performance in 2010 to date was consistent with expectations for the year and that the business was performing well, with a number of good contract wins. The company’s forward order book has moved ahead of the 2009 year-end figure of £14.1 billion.

Balfour Beatty operates across the infrastructure lifecycle with capabilities in professional services, construction services, support services and infrastructure investments. Around half of the Group's revenue now comes from outside the UK.

The group said that it was strongly positioned to address the significant long-term infrastructure demands in economies around the world -particularly since the recent acquisition of Parsons Brinckerhoff (PB). 2010 is the first time that Parsons will make a first full-year contribution in professional services. Balfour Beatty said that integration, including with Heery in the US and Balfour Beatty Management in the UK, had proceeded faster than anticipated and that PB was performing well and in line with expectations. The company said it was confident that the acquisition would deliver the strategic benefits expected.

Construction services was also continuing to perform in line with expectations with good progress on all major projects, benefiting from a strong order book and good operational delivery across a broad range of customers both in the UK and elsewhere in the world.

In support services, Balfour Beatty is a £1.5 billion revenue business focusing principally on government and regulated industry customers –with all businesses performing well and an excellent forward order book.In the water sector, Balfour Beatty is focused on the mobilisation of contracts totalling over £700 million under the new asset management plan (AMP5) where the company occupies a leading position in the market.

Balfour Beatty said it had also continued to see a good pipeline of opportunities both within a PPP framework and through other procurement mechanisms in its infrastructure investments division. The company is currently one of six bidders to reach a shortlist for phase one of the Offshore Transmission Network Owners ("OFTO") regulatory regime, to own and operate the connections from offshore wind projects to the electricity transmission network in the UK.

The Group has recently generated cash of £24.3 million via completion of the sale of its holding in the Aberdeen Waste Water concession and reducing its interest in the Edinburgh Royal Infirmary concession to 50%. Balfour’s cash position remains robust, with average net cash in excess of £400 million for the first quarter of 2010 (excluding net debt in PPP subsidiaries), partly as a result of PB post-acquisition cash flows remaining ahead of expectations.

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