Balfour Beatty has said it plans to sell off its rail business in Mainland Europe on the same day it announced a seven per cent fall in underlying profit.
Publishing the company’s 2012 figures, Balfour Beatty showed just a one per cent slide in revenue at £10.9 billion and healthy underlying profit of £309 million.
The report also confirmed that the company’s cost-cutting programme is on track to save £80 million by 2015, with £36 million of savings achieved at a non-underlying cost of £61 million in 2012.
Reported profits, however, were down 70 per cent, in part due to a £104 million loss and a £95 million goodwill write down caused by the restructuring of its European rail operations.
Balfour Beatty has already begun the process, selling its Spanish business to the company’s management.
Ian Tyler, chief executive of Balfour Beatty, said: “We have delivered a set of results for the full year that demonstrated resilience in underlying earnings and a stable order book in the face of continuing challenging conditions in the construction markets in the UK and USA.
“We have also made good progress in the implementation of measures designed to increase organisational efficiency and are on track to realise the anticipated benefits. Furthermore, our growth strategy of focusing on key market sectors and geographies is making headway, and is reflected in the continuing shift in our order book towards economic infrastructure.
“While we still believe that construction markets in 2013 will be challenging, our actions to date and ongoing strategic focus on growth markets position us well for the medium term.“
Just when it was thought that British companies were, at last, making some headway into the European rail industry, our biggest engineering firm is now pullng the plug. No doubt, DB may be considering snapping up Balfour Beatty’s German rail business, which could mean that they might start tendering for big contracts here in the UK thus adding to their already huge business portfolio.