Balfour Beatty raises share buyback scheme to £150 million
Balfour Beatty is raising its share buyback scheme to £150 million and reinstating its dividend after recording underlying yearly profit of £25 million in 2020, down from £186 million in 2019.
Its order book increased by 15% to £16.4 billion - led by the UK, with £6.4 billion - and the company aims to go "beyond net zero carbon" by 2040, claiming it has more than halved its carbon intensity since 2010. The board has recommended a final dividend of 1.5 pence, compared with 2.1 pence in 2019.
Leo Quinn, Balfour Beatty Group Chief Executive, said throughout the pandemic, it has protected the Group’s strengths, supported stakeholders and held firm to its disciplines.
"Our leading positions in large growing infrastructure and construction markets, record year end order book and £1.1 billion Investments portfolio provide confidence in future cash generation," he said. "This underpins our new capital allocation framework which demonstrates Balfour Beatty’s commitment to deliver enhanced returns to shareholders."
Figures for its Construction Services are listed below.
It believes the UK's 'lower risk order book' underpins future returns.
Its infrastructure investment pre-tax profit dropped to £20 million, compared with £98 million in 2019, but it maintains "leading positions in the UK, US and Hong Kong". It will "recommence asset disposals" in 2021 and is predicting a strong outlook, in line with 2019.
Balfour Beatty's drive for digital productivity over the last five years was also included in the results presentation.
Last month, for the second year running, Balfour Beatty secured top spot in the Heavy Construction category in Britain’s Most Admired Companies 2020 Awards.
Contractor issues head disputes list in 2020: Arcadis report
The average value of disputes globally rose from $30.7 million in 2019 to $54.26 million in 2020, while the length of disputes fell from 15 months in 2019 to 13.4 months, according to an Arcadis report.
The data, featured in Arcadis' 11th annual report, illustrates industry-wide ripple effects of the COVID-19 pandemic although interestingly the overall volume of disputes stayed relatively the same in 2020 as in 2019.
While trends in the value and length of disputes varied from region to region, all regions surveyed saw an increase in "mega disputes" related to bigger capital programs and private projects. Notably, more than 60% of survey respondents encountered project impacts due to COVID-19.
Owners, contractors, or subcontractors failing to understand and/or comply with their contractual obligations became the leading cause of construction disputes in 2020 (jumping from 3rd place in 2019), followed by owner-directed changes and third-party or force-majeure changes as the second and third-leading causes, respectively.
Highlights from the report include:
- Proper contract administration was a theme across the globe for the successful and early resolution of disputes
- Most disputes were settled through party-to-party negotiation, and a willingness to compromise played a key role in early resolution
- Among regions surveyed, the buildings (education, healthcare, retail/commercial, government) sector saw the most disputes
- In North America, construction dispute value rose from $18.8 million in 2019 to $37.9 million in 2020, while the length of disputes shortened from 17.6 to 14.2 months.
While cost and length have changed since 2019, risk management was still seen as the most effective claims avoidance tactic, while owner/contractor willingness to compromise was once again the top-ranked factor for the mitigation/early resolution of disputes.
"COVID-19 irrevocably changed every industry," said Roy Cooper, head of contract solutions for Arcadis North America. "Construction disputes experts will have to continue to adapt, even post-pandemic, as workforce expectations, climate events and government infrastructure funding change how projects are designed and contracted in the future."
The research presented in the report was compiled by Arcadis based on survey responses, global construction disputes the team handled in 2020 and contributions from industry experts.