Construction firm Balfour Beatty more than doubled profit last year, thanks to being more selective when bidding for contracts.
The company on Wednesday announced that underlying profit from operations had come in at £196m for the year to the end of December, which was up from £69m in 2016. Profit after tax increased to £143m from £48m and basic earnings per share rose to 20.9p from 7.2p.
The broader UK construction sector has been hit hard by write downs and profit warnings, partially as a result of rising wages, project delays and other unexpected costs. Carillion went into liquidation in January, putting thousands of jobs at risk.
But Balfour’s latest results prove that its turnaround efforts, which included changing the way it bids for projects and selling off assets which it considers to be non-core, are starting to pay off.
“The business increased bid margin thresholds … coupled with a lower risk profile, so that the group wins work at appropriate terms and conditions,” Balfour said.
The company said that it had incurred a one-off non-underlying charge of £44m in 2017 due to Carillion’s liquidation. Balfour was one of Carillion’s joint venture partners.
Over the coming year, Balfour said that it expects its construction services and support services businesses to “continue their positive trajectory to achieve industry-standard margins”.