International infrastructure group Balfour Beatty said it expects its year-end order book to stand at around £15 billion after contract wins in December.
In a trading update in advance of its results for the year ended 31 December 2012 - to be announced 7 March 2013 - the group said overall 2012 performance remained in line with expectations.
The order book was £14.2 billion at 30 November 2012, but orders awarded in December, such as the eight-year £1.2 billion National Grid contract, boosted Balfour’s order book to the £15 billion mark.
Balfour foresees a tough 2013 but said: “In keeping with our strategy and given the difficulties in a number of our markets, particularly in UK construction and European rail, the order book mix is shifting from construction to professional services and support services, and overall, from buildings to infrastructure projects.
“Due to the longer-term nature and back-end loaded margin profile of these contracts, most of the benefit to revenue and profit arises in 2014 and thereafter.”
The group said average net debt for 2012 was approximately £50 million, reflecting the significant cyclical unwind of working capital during the year; it expects to have ended the year with a broadly cash-neutral position.
On its outlook, Balfour Beatty said:
“In the medium and long term, we are confident that our position in infrastructure markets, our focus and competitive advantage in the transportation, rail, power, water and mining verticals, and our initiatives to access growing markets such as Australia, Canada, Brazil and India will stand us in good stead as well as making the business more robust.”
New Chief Executive
Balfour Beatty has also announced that current Chief Executive Ian Tyler will hand over to Andrew McNaughton, effective from 31st March 2013.
McNaughton will take over leadership from Ian Tyler, who has led the organisation for eight years. Tyler will remain with the Group until 30th April to ensure a smooth transition.
Andrew McNaughton is currently Deputy Chief Executive and Chief Operating Officer. He joined Balfour Beatty in 1997 and was appointed to the Board in 2009 as Chief Operating Officer, leading the worldwide operations for the last three years where he has been instrumental in developing the Group’s global strategy to move into higher growth sectors and geographies.
McNaughton is currently Vice-President of the Institution of Civil Engineers (ICE).
Andrew McNaughton said:
“It has been a privilege to be part of the leadership team at Balfour Beatty for several years only now surpassed by the opportunity to take over from Ian as Chief Executive. We have a strong company and are in a good position to meet the short term market challenges and take advantage of the longer term opportunities. I am looking forward to building on the solid platform that we have created and leading us to the next stage of strategic growth."