Balfour Beatty (LON:BBY) leaders used the company’s 2025 results presentation to highlight broad-based improvement across the group, record backlog, and a stepped-up shareholder return program, while also outlining a new strategic framework intended to drive “profitable growth” in the years ahead.
2025 performance and shareholder returns
Group Chief Executive Philip Hoare said the company is “improving across every single part of our organization” and has “great momentum into the future,” pointing to operating progress, backlog strength, and capital returns as key themes. He also introduced a new strategic lens for the next phase of the business: “Evolve, energize, and explore”, which he described as strengthening the core, accelerating disciplined growth, and investing in adjacencies and technology for the future.
Harrison said group profit for the period rose 5% to £239 million, helping drive a 9% increase in earnings per share to 47.6 pence, alongside the company’s buyback activity. The company’s order book rose 23% to £22.7 billion, which management described as high-quality and resilient.
The board announced a final dividend of £0.098, bringing the full-year dividend to £0.14, a 12% increase. Management also committed to a £200 million share buyback for 2026.
Segment results: construction services and support services
In construction services, Harrison said overall profit from operations (PFO) grew 8%.
- U.K. construction: Harrison said the division had an “excellent year.” Excluding insurance recoveries, profits rose 22% and the business surpassed its 3% margin target a year earlier than planned, supported by better operational performance and a lower-risk contract mix. The company received an £11 million insurance recovery in the first half tied to an ongoing project. Management said it expects U.K. construction margins in 2026 to exceed the 3.2% achieved in 2025.
- U.S. construction: PFO was £25 million. Strong growth and delivery in buildings was offset by cost overruns and schedule delays on the Texas Highways project. Harrison said the second half was much better, with buildings continuing to grow and civils stabilizing, and that the group beat its August forecast. For 2026, management expects more revenue growth from buildings, completion of the delayed Texas project this year, and PFO beginning to recover toward historic levels in 2026 with further progression in 2027.
- Gammon (Hong Kong JV): Revenue fell 30% as two major Hong Kong Airport projects moved toward completion. PFO declined by only £2 million, as improved margins and operational performance largely offset lower volumes. Management expects 2026 PFO to be broadly in line with 2025.
Support services reflected what management described as the group’s growth themes, particularly in power. Revenue rose 18%, with power revenue nearly doubling over two years and outperforming prior plans. PFO increased 31% to £122 million and margins were 8.5%, above the company’s target range. Management expects further revenue growth in 2026 driven by power and said it is focused on keeping margins above 8%.
Backlog strength and market opportunities
Harrison said the order book increased across all four divisions. U.K. construction backlog rose 44%, helped by orders including Sizewell C and NetZero Teesside. He emphasized the group’s “disciplined contracting approach,” noting that 88% of U.K. construction orders are on target cost or cost-plus terms.
In the U.S., backlog rose 18% in dollar terms with growth in both buildings and civils. Gammon’s order book increased on civil and buildings work, particularly tied to Hong Kong’s Northern Metropolis development area. Support services backlog rose 25%, driven by rail and power.
Hoare highlighted the company’s growth opportunity in the U.S., citing 28% revenue growth and 18% order book growth in the prior year. He described a “land and expand” approach in geographies where the company is already strong, and an effort to deepen customer relationships with national footprints. He also pointed to two specific U.S. growth markets:
- Data centers: Hoare said the market opportunity is around £250 billion over the next five years and that Balfour Beatty has a 20-plus-year track record delivering data center shell and core work. He said data centers are around 6% of the company’s U.S. portfolio today, but management sees “significant growth,” including expansion into states such as Virginia, Texas, Georgia, Pennsylvania, and other areas where the company already has strength.
- Aviation: Hoare cited about $140 billion of investment over the next five years and said airport delivery expertise transfers across geographies, leveraging experience in the U.K. and Hong Kong.
In the U.K., Hoare said the company is focused on energy, defense, and transportation, citing market opportunities over the next five years of £70 billion in energy, £15 billion in defense, and £85 billion in transport. He also pointed to investments in skills, noting that 9% of the workforce is in “earn-as-you-learn” positions.
Infrastructure investments, cash, and outlook
Infrastructure investments remained an area of attention, particularly related to U.S. military housing. Harrison said higher military housing costs increased the division’s pre-disposal operating loss, offsetting much of the improvement from earnings-based businesses and limiting group PFO growth to 2%. The company is working to conclude the Department of Justice monitorship by June 6. If that timeline is met, management expects the investments business to post a small loss before disposals in 2026 and return to more normal profits in 2027.
Disposals were a 2025 highlight, with the company selling 12 assets for £120 million and generating £36 million of gains, above guidance. Harrison said each deal achieved a 2 to 2.5 times cash multiple and was at or above directors’ valuation. For 2026, management expects disposal gains of £5 million to £15 million, and Harrison said investors should “think about something similar” in 2027.
Average net cash rose to £1.2 billion, helped by a large working capital inflow. Operating cash flow was nearly £300 million, with working capital increasing by £400 million driven by revenue growth in U.S. construction and power and what management called rigorous cash management. Harrison said working capital ended 2025 at 17% of revenue and is expected to operate in a 15% to 18% range in the medium term. For 2026, the company expects average net cash of £1.3 billion to £1.5 billion.
In the outlook for 2026, Harrison said the company expects solid PFO increases, driven mainly by improved margins in U.K. and U.S. construction and higher support services revenue, which should support “high single-digit” growth. Net finance income is forecast at £28 million to £32 million, with the effective tax rate expected to be close to statutory levels.
Hoare closed by reiterating confidence in the company’s platform for continued performance, citing the quality of the order book, disciplined project selection, and a robust balance sheet, and said he plans to provide more detail later in the year on the “evolve, energize, and explore” agenda.
About Balfour Beatty (LON:BBY)
Balfour Beatty is a leading international infrastructure group. With 26,000 employees across the UK, US and Hong Kong, we’re leading the transformation of our industry to meet the challenges of the future.
Trusted by our customers to deliver sustainable solutions and strengthen communities, we finance, develop, build, maintain and operate the increasingly complex and critical infrastructure that supports national economies and deliver projects at the heart of local communities.
Collaborating with governments, our customers and partners, we deliver powerful new solutions, shape thinking, create skylines and inspire a new generation of talent to be the change-makers of tomorrow.
