Balfour Beatty jumps as stronger construction activity drives revenue growth, dividend hiked

Balfour Beatty shares were higher on Wednesday after the construction services group released 2023’s full-year results revealing a year of progress in terms of profits and revenue.

Revenue grew 7% to £9.6bn and underlying profit from operations (PFO) rose 2% to £236m. Profit before tax fell due to the impact of disposals.

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Balfour Beatty shares were up 9% to 360p at the time of writing.

“Balfour Beatty has built a sturdy reputation with investors in recent years. The international infrastructure firm has consistently produced growing profits and delivered attractive shareholder returns. This morning’s earnings update will further cement that reputation,” said Mark Crouch, analyst at investment platform eToro.

“The business reported a jump in revenue and profits for 2023. Despite a marginal dip in the order book, they expect growth to continue into 2025. More welcome news for shareholders was the increase of the dividend and share buyback program, with the latter being raised to £100m, set to complete by December 2024. All are very good signs.”

Balfour Beatty’s outlook was particularly encouraging. The company said, ‘The Board expects an increase in PFO from its earnings-based businesses in 2024, with growth accelerating in 2025.’ The group sees investment in infrastructure projects supporting earnings in the coming periods as well as positive contributions from disposals.

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Shareholders will enjoy a 10% increase in the final dividend to 11.5p.

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