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Balfour Beatty confident despite uncertainty

Balfour Beatty faces uncertainty after government spending cuts but is confident overall as its order book grows.

In a trading update ahead of its interim results next month, the company said that its order book is expected to be over the £14.1 billion reported for 31 December last year, and that trading was in line with expectations for the year.

Average net cash at Balfour Beatty was more than £400 million for the first half of the year, excluding net debt in PPP subsidiaries, compared with £224 million in the first half of 2009.

Balfour Beatty said that there were uncertainties in some of its markets, following the announcement of cuts in government spending on infrastructure. However, prospects “remained robust” in other markets and the company was confident about the outlook for the group as a whole.

Balfour Beatty’s construction services division continued to perform well overall, the company said, with cost controls offsetting a drop in volumes.

In its infrastructure division, Balfour Beatty is preferred bidder on five projects so far this year. 

The full 2010 figures will show a contribution from Parson Brinckerhoff. The company said that integration was happening fast than anticipated. Good volumes in UK civil infrastructure and Hong Kong have been outweighed by reduced volumes in most other markets, particularly in the US.

Balfour Beatty has also won contracts in its support services division, including with QinetiQ and North East Lincolnshire Council

The company said it expected performance at the division in for the year to be weighted towards the second half, after investment in a national operations centre for facilities management customers and a slow start-up of AMP5 contracts in the water and utilities sector.

The results for the six months to 26 June will be announced on 11 August.