Balfour Beatty H1 Earnings Call Highlights

Balfour Beatty delivered strong first-half growth: Revenue rose 8% to £5.6 billion, earnings-based profit increased 42% to £153 million, and EPS climbed 51% to 21.7 pence. The company also raised its interim dividend 12% and remains on track to complete its £200 million share buyback. U.S. Construction returned to profitability, while U.S. buildings and U.K. power transmission drove growth. The power transmission order book increased to £2.1 billion, supported by a £6 billion–£8 billion pipeline of projects in design. Management raised full-year guidance for low double-digit growth in earnings-based business profit, higher net finance income and average net cash of £1.5 billion–£1.7 billion, while maintaining its strategic focus on U.K. energy, defense and transport, plus U.S. buildings.

Balfour Beatty reported higher first-half revenue, profit and cash generation for 2026, citing growth in U.S. buildings and U.K. power transmission as well as an improved performance in U.S. construction. Group Chief Executive Philip Hoare said the company delivered “profitable growth and strong cash performance” during the period. He also noted that the U.S. monitorship concluded on June 6, a development he described as an important milestone that allows the company to focus on service delivery for U.S. military housing customers.

Revenue increased 8% to £5.6 billion, or 10% excluding foreign-exchange movements, according to Chief Financial Officer Myles Westcott. Profit from the group’s earnings-based businesses rose 42% to £153 million, while group profit for the period increased 44%. Earnings per share rose 51% to 21.7 pence, helped by the ongoing share buyback program.

The company declared an interim dividend of 4.7 pence per share, up 12% from the prior year. Balfour Beatty said it remained on track to complete its £200 million share buyback by year-end and expects total shareholder returns of £267 million during 2026.

Profit from operations margin in Balfour Beatty’s earnings-based businesses rose to 2.9% from 2.2% in the comparable prior-year period. Westcott said U.K. Construction delivered a 3.4% margin, representing a 50-basis-point improvement after excluding a one-off insurance recovery recorded a year earlier. U.S. Construction returned to profitability, generating £22 million in profit from operations compared with a loss in the first half of 2025. Revenue in U.S. buildings rose 19%, while losses in the civil engineering business were reduced as a Texas highway project approached final closeout. Management said the long-term target margin for U.S. buildings remains between 1.5% and 2%. Hoare said the business intends to maintain an approximate 90%-to-10% mix between buildings and civil engineering, respectively, while cautiously managing risk in U.S. civils following prior issues on the Texas project.

Support Services recorded a 10% revenue increase and profit from operations of £66 million, producing a 9.1% margin. Westcott attributed the performance to margin gains in both power and transportation, as well as a greater contribution from power transmission work. He said the business could finish close to a 9% margin for the full year, although he did not characterize 9.1% as a new normal.

The group’s order book was broadly stable at £22.9 billion, providing what management described as visibility over the coming years. Balfour Beatty also cited a substantial pipeline of selected but not yet contracted projects. In U.K. power transmission, revenue increased 24% year over year and the order book rose to £2.1 billion.