Balfour Beatty has used extra cash generated in the first half of 2018 to pay down debts, its interim results revealed this morning.
The company paid down $45m (£35.4m) of US loans and redeemed £39m of its bonds, which left it with increased net cash of £366m at the end of June compared with £161m 12 months ago.
It plans to repay a further £214m in loans at the end of 2018.
Balfour Beatty’s pre-tax profit for the first six months of 2018 increased fourfold from £12m to £50m compared with the same period of last year.
This came as revenue fell more than £300m year on year from £3.54bn to £3.22bn, which left the firm with a pre-tax margin of 1.6 per cent.
Chief executive Leo Quinn said all areas of the business were now performing well.
“The group’s half-year 2018 results demonstrate Balfour Beatty’s continuing transformation under the Build to Last programme, with all businesses either delivering industry-standard margins or on track to do so in the second half of the year,” he said.
The UK construction business saw underlying operating profit increase from £2m to £5m, but was hit by a further £23m loss on the Aberdeen Western Peripheral Route (AWPR).
This was largely due to its JV with Galliford Try missing deadlines on the job, but £8m of the loss was attributed to extra liabilities the firm took on following the collapse of Carillion, which had been the third joint venture partner on the £745m bypass.
Balfour Beatty confirmed the delayed project would now be completed in the autumn.
The Transport Scotland scheme has suffered delays and cost overruns, with Galliford Try forced to raise £158m in equity to cover losses on the scheme earlier this year.
In June an investigation by Construction News uncovered allegations of serious health and safety issues on the scheme, which led to questions being asked in the Scottish parliament.
Balfour Beatty’s interim results showed that its order book grew to £12.6bn as of 30 June, up from £11.4bn a year earlier.
Orders for the UK business were static at £2.7bn; however, this does not include the £2.5bn of HS2 contracts through its JV with Vinci, which will be included in mid-2019.
Mr Quinn said Balfour Beatty’s growing order book and falling costs gave “confidence for profitable growth in 2019 and beyond”.
Mr Quinn is the highest-paid chief executive among publicly listed construction companies, according to analysis by Construction News, having taken home £5.4m in 2017.
For 2017 Balfour Beatty reported full-year pre-tax profit of £117m, which was its highest since 2012.
Mr Quinn has been focusing on strengthening the company’s balance sheet, and told Construction News earlier this year it was the strongest in the industry.