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Balfour Beatty stock rises on robust earnings and buyback plans

Published 12/03/2025, 11:20
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Investing.com -- Shares of Balfour Beatty (OTC:BAFYY) climbed 2.7% following the company’s announcement of a solid earnings beat and aggressive shareholder return plans.

The infrastructure group reported a Profit from Operations (PFO) 2.8% above consensus, with a significant 11% increase in its order book since the first half of the year, indicating a strong outlook. The growth was primarily driven by performance in the United States and its Support Services division.

The company also declared a £125 million share buyback program, an increase from £100 million the previous year, and a dividend of 12.5p, both surpassing consensus expectations. While the earnings guidance was in line with expectations after adjusting for the beat, the announcement of £49 million in one-off charges might temper investor enthusiasm.

For the fiscal year 2024, Balfour’s PFO reached £252 million, outperforming the guidance that anticipated a figure ’ahead of the prior year’ of £236 million. Looking ahead to 2025, the company expects its PFO from earning-based businesses to increase, with further growth projected for 2026.

The group remains on target for a 6%-8% PFO margin range and anticipates a ’further improvement’ towards a medium-term 3% PFO margin goal for UK construction in the next two years. The US construction sector is also expected to see improved PFO in 2025.

Additionally, Balfour anticipates gains from disposals in the range of £20-30 million for 2025 and projects net finance income of ’around’ £25 million. Capital expenditures are forecasted to be approximately £35-40 million for the year, aligning with analyst expectations.

The company also expects to maintain working capital broadly flat and predicts an average cash balance of ’roughly’ £800 million in 2025. The effective tax rates across its operating regions are projected to stay ’close to statutory rates’.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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