Balfour Beatty Has Revealed That They Have Managed to Move Back Into Profit


Balfour Beatty, the British multinational infrastructure group, and civil engineering company has revealed that they have managed to move back into profit for the first half of 2017. This year the company has recorded a pre-tax profit of £12 million. In the same period last year, the company was in a worse position, recording a £15 million loss. This amazing turnaround is great news for the group, who have gone through a bad patch with a number of construction contracts not delivering their expected results.  

The positive financial results for Balfour Beatty has come as the management have been making changes and cuts as part of their Build to Last programme. The business has become more streamlined, offering their services to a narrower market in order to make the most of the capabilities they offer. Through this transformation the company has become more profitable, and these results have surprisingly been made without the disposal of any material investment.

In the UK the company has managed to turn itself around from a £69 million loss to a £2-million-pound profit. Another explanation for their recovery is Balfour Beatty’s bidding tactics for contracts. During the company’s loss years, the company appeared to be being too aggressive in their bidding, practically removing all of their margins and then making a loss on the project. With margins vital to maintaining a healthy profit in the construction industry, the company have had to alter this approach in order to improve their financial circumstances before it got any worse. Being more selective when choosing the contracts they bid on has also allowed the multinational infrastructure and civil engineering group to fill their books with contracts offering higher margins and a greater likelihood for profit. It would appear that in order to function successfully as a large multinational organisation the quality of the contract wins out over the number of contracts won.


Latest Issue

BDC 305 Jun 2023