Balfour Beatty, the international infrastructure group, has maintained its order book at a level in excess of £15 billion according to its latest Interim Management Statement, covering the period 1 January to 8 May 2012 published this morning.

The Group said that overall trading performance had been consistent with the outlook given at the time of the full-year results. Balfour’s order book has been supported by good wins in the international businesses and growth verticals. However, while the firm said it seeing some signs of recovery in the US, as anticipated, the UK construction market remains challenging.

Balfour Beatty’s Construction Services order book was slightly lower than at the year-end, with orders in the international businesses and in rail partly offsetting the shortfalls in the UK and the US. Strong revenue performance in the US and Hong Kong resulted in higher overall construction revenue than in Q1 2011. Revenue in the UK was stable at the Q1 2011 level with particular strength in the Southeast.

However, the firm’s margins remain under pressure - as indicated at the time of the full-year results announcement.  Looking ahead, Balfour Beatty said the operating environment in the construction sector remains challenging in some of its major markets. The UK market is expected to remain competitive. The Statement said:

“We are taking the necessary actions to manage the businesses through this period including those which will drive further structural efficiency across the Group.”

Balfour Beatty is continuing with the implementation of the cost efficiency programme announced in 2010 and expects to reach the targeted savings of £30 million p.a. by 2013.

In March 2012 the firm announced plans to build on the existing programme with additional targeted savings of £50 million p.a. by 2015. Some of the new measures will impact existing employees and a consultation process has now started. Balfour Beatty said the majority of the benefits of the programme are likely to be delivered in 2013, underpinning margins primarily in UK Construction Services and Support Services.

In Support Services, the order book has continued to grow since the year-end with good results in facilities management and steady progress in the local authority and the utilities businesses.

Balfour Beatty’s Professional Services order book at the end of March was ahead of that at the year-end with new orders in the Middle East and steady progress in the Americas.

Revenue was in line with expectations with the slowdown in the UK being offset by good revenue growth in the Americas. Performance stabilised in the UK owing largely to the initiatives the business implemented in 2011 to align costs with the lower volume of activity in the market. Overall, Professional Services is expected to make progress in the year.

In Infrastructure Investments, Balfour said it is currently bidding for a number of projects both in the UK and internationally, which will ensure that it continues to have a range of good opportunities for future investment.

The Group, a global business which generates £11 billion of revenue across 80 countries. said its financial position remains strong with average net cash in the first quarter exceeding £100 million. Looking ahead however, it is anticipating a reduction in Q2 before an increase in the second half.