Balfour Beatty, the international infrastructure group, has provided a trading update for the period up to 7 December 2023. The company expects its order book at the end of the year to be slightly higher than the £16.4 billion reported at the half-year mark. It also anticipates that its 2023 revenue will be approximately 5% higher than the previous year, driven by increased volumes in the UK's HS2 project and major airport projects in Hong Kong. The underlying profit from operations is expected to be in line with the prior year, and the gain on Infrastructure Investment disposals for 2023 is projected to be £26 million. The company's average monthly net cash is expected to be in the range of £650-£700 million.
In terms of operational updates, Balfour Beatty's US Construction division has seen a stronger order intake in the second half of the year, with two commercial real estate projects in Texas and additional Federal work in Washington DC. In the UK, the HS2 works at Area North and Old Oak Common are progressing well, and the cancellation of HS2 Phase 2 has not affected the company's order book. In Hong Kong, the operational performance at Gammon remains strong due to increased work on major airport projects.
In the Support Services segment, Balfour Beatty has signed a six-year extension worth £330 million for its highways maintenance contract with Lincolnshire County Council. The rail business was awarded a £43 million contract for upgrade works on the London Underground's Piccadilly line, and the power transmission and distribution team was selected as one of ten preferred bidders on SSEN Transmission's £10 billion Accelerated Strategic Transmission Investment (ASTI) framework. The company expects orders in the power business to expand from 2024 as the industry prepares to support the UK Government's Net Zero ambitions.
Balfour Beatty has disposed of two assets in the second half of the year, resulting in a combined gain on disposal of £26 million. The company's capital allocation framework aims to deliver attractive total cash returns to shareholders while maintaining a strong capital position. Once the 2023 share buyback program is completed, a total of £595 million will have been distributed to shareholders through share buybacks and dividends since the start of 2021. The company plans to continue its share buyback program in 2024.
Leo Quinn, Balfour Beatty Group Chief Executive, expressed confidence in the company's performance, stating, "Balfour Beatty's solid performance has continued in the second half of the year, and the Board remains confident that the Group will achieve our expectations for the full year." He also confirmed the company's plans for a fourth successive year of share buybacks in 2024.
Balfour Beatty is a leading international infrastructure group with 25,000 employees. The company is involved in financing, developing, building, maintaining, and operating critical infrastructure projects worldwide. Some of its notable projects include Hinkley Point C, the Lyric Theatre in Hong Kong, and the Automated People Mover superstructure at Los Angeles International Airport.