Balfour Beatty plc, the international infrastructure group, is providing this trading update in advance of its results for the year ended 31 December 2010 which will be announced on 3 March 2011.
Further to our Interim Management Statement of 11 November 2010, overall trading performance for the year continues to be consistent with our expectations.
Our high-quality order book of £15 billion reflects the strength of our technical expertise, increasing local coverage and ability to provide integrated solutions.
In Professional services, Parsons Brinckerhoff’s results are included for the full year for the first time. Performance has exceeded our expectations despite the continuing delay in the re-authorisation of the Highways Bill in the US, which has limited the progress of the award of larger projects. We have continued to make good progress on improving the efficiency of the global operations post-integration.
Construction services has performed well overall. Although we have not yet seen a discernible recovery in the parts of the UK market which have been weak, the business benefited from good operational performance and ongoing tight control of costs. The reduction in the rate of revenue decline seen in the US at the time of the Q3 IMS has continued into Q4, and Hong Kong has remained buoyant.
In Support services, we have had a good year with substantial new wins. However, revenue and profits for the year have been impacted adversely, as anticipated, by a slow start-up of AMP5 contracts in the water utilities sector which has continued through the second half.
In Infrastructure investments, we have had a number of significant wins in 2010 and continue to have an active pipeline of bids. We recently achieved financial close on the Derby City, Ealing and Oldham schools programmes. In addition, we are working to bring a further four projects in a range of sectors to financial close.
Our cash position remains strong, with average cash in the second half of the year exceeding £400 million, compared to £342 million for the same period in 2009.
Balfour Beatty is strategically well-placed in major markets to benefit from the long-term growth in global infrastructure spending. The Group’s order book, its capabilities across the infrastructure lifecycle and its operations in diverse markets and geographies give the business strength and resilience.