©Bloomberg

In the canon of business drama, the fall and recovery of an overextended contractor is a classic. Take Balfour Beatty. Up to 2010 was hubris — growth at all costs, including 45 acquisitions — begetting a litter of lossmaking contracts and a higgledy-piggledy structure. Then nemesis, with seven profit warnings, and catharsis, as new management arrived to reimpose such old virtues as simple organisation and choosier bidding. Wednesday’s half-year results drew back the curtain on the latest scene, with an unexpected new player — Brexit.

Thus far, Balfour reports little actual damage (though it used the referendum aftermath to launch a brazen plea for more UK infrastructure spend). Its legacy contracts are a diminishing drag, and losses of £66m on £862m of UK sales were better than expected — enough for an underlying profit of £7m and the resumption of the dividend. Yet its equity is valued below £1.8bn. Without its £1.25bn portfolio of private finance initiative projects the core business is being assessed as worth just £500m.

Caution is justified: for construction a good result is generating 2 or 3 per cent operating profit margins, leaving little room for bad luck such as Brexit. Political risk makes planning harder, particularly in manpower, where supply was already tight. Balfour likes to bring on young staff, but to promise a full career it needs long-term certainty over large projects, recently in short supply. Threatened curbs on immigration do not help either.

Against this, £500m is cheap for the core construction business with over £7bn annual sales, half from the US. Its operational reboot is on track. Most of a £100m savings target has already been realised. Lower-for-longer interest rates should boost the £1.25bn value of the project portfolio, leaving the core construction business even cheaper. It is winning orders in areas where it is has made money, such as a Californian rail electrification project. Closer to apotheosis, then, but too soon to call a happy ending.

Email the Lex team at lex@ft.com