UK infrastructure giant Balfour Beatty’s turnaround has continued to gather pace as the firm boosted profits by more than a quarter in the first half of the year.
The company said it has been strengthened by increasing the amount of work it does outside the UK, following a slowdown after the 2016 Brexit referendum.
Shares in the company surged in early trading after pre-tax profits jumped 26% to £63 million in the six months to June, as it was buoyed by a strong order book.
Revenues grew more marginally, rising to £3.88 billion in the half year from £3.84 billion in the same period last year.
It said its Build to Last turnaround programme has helped improve profits by selecting lower risk contracts and focusing on cash returns.
The FTSE 250 firm said decisions to proceed with the HS2 high-speed rail network and the expansion of Heathrow would significantly improve its outlook.
Leo Quinn, Balfour Beatty’s group chief executive, said: “This is another strong set of results – increasing profits backed by a strong cash performance, plus carefully managed growth in our order book.
“Today, the group’s geographic and operational diversity underpins our risk management, with over 50% of our business and investments portfolio assets outside the UK.
“Combined with the strength of our balance sheet and cash flows, this positions Balfour Beatty to create and return future value to shareholders.”
John Moore, senior investment manager at Brewin Dolphin, said: “I am sure that Balfour Beatty’s management has wanted to prove it is different to some of its peers and today’s update goes some way towards making that statement.
“It’s a decent performance from the business, but in the short term the company may continue to be tarnished with the same brush as its competitors – despite improvements noted in its update, the shares are down around 30% on a year ago.”
Shares in Balfour Beatty rose by 11.5% to 225p in early trading on Wednesday.