Balfour Beatty Share Discussion Threads

[hvs] 21/5/2014 14:30

BUNCH OF IDIOTS IN CHARGE

Bonuses all ROUND

[4spiel] 21/5/2014 13:08

Where is the money coming from to sort them out.A big spend Labour Government? If it happens -a nice joy ride as long as it lasts. meanwhile short to 150 ?

[par555] 21/5/2014 08:54

I would expect the company to sort itself out eventually. Meanwhile the prefs which went ex-div today can be bought at 115.5p for a yield of 9.3%. So I think i'll take a few more of them and wait on developments in the share price of the ords.

[salpara111] 19/5/2014 14:47

Traded this successfully last year getting in at 220 and exiting at 280.
Not sure that I would be quite so keen to jump in again yet.
There is clearly quite a bit of confusion around as to what they are up to but in the long run I would imagine that value will out.

[nw99] 19/5/2014 12:00

Bought back in here

[nevik2] 14/5/2014 22:22

No bounce yet Certainly hit a support level, hopefully it will hold. Then we might get a bounce, give it a few days.

[hamblyr] 12/5/2014 15:48

Starting to bounce......

[proj] 11/5/2014 15:25

vaulted. 'Making conversation'? How is asking something you (now claim to) know the answer to making conversation? That's rather pathetic/sad, isn't it.

You've 'made more money' than me......grow up, aye son. That statement alone tells me you're not a credible investor; you've trawled through my posts and saw I made £12,000 on HOIL (in 10 months), and you then say you 'make more money' than me.

Listen, matey boy, HOIL was NOT my only investment....so how can you have a clue what I make or don't make???

By the way (for your records on me), the place I put the HOIL money is already up 10%. Now run along, will you (and ask some more silly questions).

[n3tleylucas] 11/5/2014 13:12

Balfour Beatty U-turn highlights cracks in strategy

From the Shanghai Tower in Hong Kong to the redevelopment of the Battersea power station in London, Balfour Beatty has splashed its logo on the hoardings of numerous high-profile building projects.
But the cracks in the 109-year-old construction company were laid bare on Tuesday as it was forced to announce a strategic U-turn that stunned analysts.
"I was completely flabbergasted," said one, reacting to the news that Balfour planned to offload Parsons Brinckerhoff, the US consulting business it bought in 2009 for more than $600m and which remains its biggest acquisition.
News of the potential sale, announced alongside the sacking of Andrew McNaughton, chief executive, and a fresh £30m hit to profits – the third warning in 18 months – marks a big change of direction for the company.
The Parsons Brinckerhoff deal was part of a plan to create a cradle-to-grave global infrastructure services business. The consultancy would engage clients with its design and engineering expertise, raising the likelihood that the company would be awarded work for its construction division, which would then lead to maintenance contracts for its support services arm.
"Our logic on Parsons Brinckerhoff was clear," says Steve Marshall, the chairman who now takes on executive responsibilities while a new chief executive is found. "We hoped that, not only was it a good business in its own right . . . but that there would be real synergies."
The reality, however, was that the move did not generate the hoped-for cost savings. The synergies produced by the transaction had been "very modest", he said.
Stephen Rawlinson, analyst at Whitman Howard, said the board's moves suggested "the word 'panic' might be close to some people's thinking".
"There is no sense we have from the conversations that the board is 'ahead of the game' yet or that it will be for some while," he added.
It is ironic that Tuesday's trio of announcements from Balfour comes with its "bread and butter" UK construction market picking up, according to Westhouse Securities. The Construction Products Association, which represents manufacturers and suppliers in the £40bn UK industry, expects the sector to expand 3.4 per cent in 2014 and 5.2 per cent in 2015.
Although Balfour Beatty is a global business employing 40,000 employees across 80 countries, the core domestic UK market has so often been the company's undoing over the past two years. Among its many one-off hits was a £26m charge for restructuring its UK construction services arm.
The company drafted in industry veteran Nicholas Pollard in April last year to sort out the problems in the division. His management team reviewed all operational contracts and improved basic disciplines such as estimating costs when bidding for work. But Mr Marshall admitted yesterday that even this restructuring had taken a toll, with experienced staff quitting the business and morale among existing employees low.
"We have achieved costs savings, but at a price," he admitted. "The restructuring we did was necessary but it also made us more vulnerable in a difficult market."
Balfour also warned that it expected average net debt to increase by £25m for the full year to £375m – raising concerns about rising borrowings at a business that was comfortably in net cash through the financial crisis and leading up to the acquisition of Parsons Brinckerhoff, which was partly funded by a rights issue.
The potential sale of Parsons Brinckerhoff, which Mr Marshall said would draw interest from both trade buyers and private equity, set off a flurry of speculation about the future of Balfour, with the residual management team fielding questions from analysts about a potential break-up or sale of the entire business.
Balfour on Tuesday pledged to stand by its US and UK construction businesses, as well as the infrastructure investments arm – all operations it sees as "core", and which generated more than 70 per cent of Balfour's £10bn revenues in 2013.
More vulnerable are joint ventures in the Middle East and Hong Kong, as well as the support services business, which carries out maintenance jobs on utility networks, roads and railways and forms part of Balfour's one-stop construction services shop.
Analysts suggested that the company would readily find a buyer for Parsons Brinckerhoff, though one cautioned that it was a "big beast" to sell, with about £1.7bn in revenues. Joe Brent, analyst at Liberum, added: "The risk is that this business, which is a people business, could unravel."
With Balfour Beatty's market capitalisation shrinking by as much as £400m on Tuesday, analysts also speculated that the group could face a takeover bid for the entire business.
"We're expecting interest from overseas buyers in the entire business," said one. "At the moment Balfour is weak but it has immense brand capabilities and geographical reach so could prove attractive given the market is bound for consolidation."

FT

[n3tleylucas] 11/5/2014 13:08

Not sure people are euphoric 4spiel? I'm sure some would like to see a good tranche of debt repaid.

[4spiel] 11/5/2014 12:57

Yes you will get payout for Psrsons B but with a share consolidation will you be any better off ? They are also selling when the £ is high against the $ -why not wait until it crashes again. Only saying don't get too euphoric !

[vaulted] 11/5/2014 12:51

Proj, I did see the 6.3,which I thought was pretty good,so just making some polite conversation,and I will be the judge regarding being any where near the markets or not.
Ps..probably got more ill-gotten gains (as you call them)on Hoil than you have.

[kaffee] 11/5/2014 12:23

C'mon on then Proj... let's be having your magical insight.

I'm dealing with what we know in my post.

[n3tleylucas] 11/5/2014 11:52

We are twins separated at birth mate lol

[proj] 11/5/2014 11:46

kafee: "forget the future" WTF?? that's absolutely priceless.

Vaulted, if you can't find the divi on a share, you really shouldn't be anywhere near the markets (FYI: click the 'financials' tab above, and it's there).

[choktaw] 11/5/2014 11:27

Think alike!

[n3tleylucas] 11/5/2014 11:25

Great minds?

[choktaw] 11/5/2014 11:23

BALFOUR BEATTY is planning to return several hundred million pounds to shareholders from the sale of its American division, Parsons Brinckerhoff.

Today's Sunday Times

The embattled construction company, which last week lost chief executive Andrew McNaughton after a shock profit warning, has employed Goldman Sachs to sell the arm.

Balfour Beatty paid $600m for Parsons Brinckerhoff five years ago. It thought the deal would help it to become a one-stop shop for big construction clients, driving work into its other divisions.

Senior sources said, however, that the synergies had been less than expected, and a sale had been contemplated for some months. It is thought Parsons Brinckerhoff could fetch up to $1bn, with keen interest from private equity and trade buyers.

The proceeds will be used in part to top up Balfour Beatty's pension scheme but the bulk will go to shareholders.

[n3tleylucas] 11/5/2014 11:22

BALFOUR BEATTY is planning to return several hundred million pounds to shareholders from the sale of its American division, Parsons Brinckerhoff.

The embattled construction company, which last week lost chief executive Andrew McNaughton after a shock profit warning, has employed Goldman Sachs to sell the arm.

Balfour Beatty paid $600m for Parsons Brinckerhoff five years ago. It thought the deal would help it to become a one-stop shop for big construction clients, driving work into its other divisions.

Senior sources said, however, that the synergies had been less than expected, and a sale had been contemplated for some months. It is thought Parsons Brinckerhoff could fetch up to $1bn, with keen interest from private equity and trade buyers.

The proceeds will be used in part to top up Balfour Beatty's pension scheme but the bulk will go to shareholders.

[elmfield] 11/5/2014 11:17

Page 14 ft money, sell. Best avoided till things become clearer.

[deanowls] 11/5/2014 11:09

what did the ft say?

[elmfield] 11/5/2014 10:58

From what the ft says this is only going one way.

[kaffee] 11/5/2014 09:36

Am I missing something obvious ?

Company have just guided that its minimum profit figure for this current financial year is going to be 145m ?

Market cap is 1.5 bn. That's cheap is it not ?

Forget the future, in the right here and now we know what this years profit will be, the CEO has manned up and walked and one would assume that was to wrap up all the bad news into one parcel... new guy will not have any bad news to deliver.

No mention of divi cut and a quick scan of the last couple of years headline figures shows that profits have been a lot lower than this with a divi increase ?!

So come on roll up.. point out what I've not taken into account.

And anyone saying markets are "forward looking" will get a kick in the knackers as that's just a well hackneyed phrase.

[vaulted] 10/5/2014 13:31

Is the divi just above 6%. Tia