Balfour Beatty has lifted annual profits expectations on the back of rising interest rates and lower tax charges.
The construction firm anticipates benefiting from further growth in interest income in 2023 as central banks continue to try and dampen spiralling inflation.
It also expects to begin additional share buybacks from January once its current repurchase programme completes this month, by which point it will have returned more than £385million to investors since the start of last year.
Big deals: Balfour Beatty was recently named the sole contractor for two UK civil engineering contracts worth up to £4billion from public sector procurement authority SCAPE
Since Covid-19 restrictions started being gradually loosened, the group has won a considerable volume of sizeable contracts for work on infrastructure projects across Britain, the US and Hong Kong.
In recent months, Balfour Beatty has been named the sole contractor for two UK civil engineering contracts worth up to £4billion from public sector procurement authority SCAPE.
As part of the arrangement, the London-based company will work with local and national government on schemes across a wide array of industries, such as motorways, defence and marine.
Other significant deals won by the HS2 contractor include a seven-year contract worth almost £300million from East Sussex County Council to maintain roads and provide infrastructure services.
This contract has an option to be extended for seven further years and comes on top of a similar deal agreed with Buckinghamshire Council in August.
Outside the UK, the business has acquired a healthy volume of large orders in the US this year, the largest being a $700million (£530million) deal to build a car park and campus building at Fort Meade, Maryland.
And, after winning a contract to construct a 25-storey office building on behalf of hotel chain Mandarin Oriental, its Hong Kong joint venture, Gammon, now has a record order book.
Balfour Beatty now forecasts its total year-end order book and revenues to be about 5 per cent higher than it was 12 months ago, although it mostly credits this to favourable foreign exchange movements.
Leo Quinn, the firm’s chief executive, said: ‘We continue to expect a strong full-year operational and financial performance.
‘Looking to 2023 and beyond, our improved, de-risked and diversified order book gives us confidence that we will continue to make progress in delivering profitable managed growth.’
Following the trading update’s release, Balfour Beatty shares increased by 3.3 per cent to 342.4p by the mid-afternoon, making it one of the top ten risers on the FTSE 250 Index.
Victoria Scholar, the head of investment at Interactive Investor, said: ‘Amid the market turmoil and macroeconomic headwinds, Balfour Beatty has proven itself to be a stock market winner this year, defying the doom and gloom to stage a rally of over 25 per cent year-to-date.’
