Balfour Beatty Share Discussion Threads

[essentialinvestor] 04/4/2022 15:01

Contra cyclical play as their work keeps flowing regardless ?.


CEO adding a chunk at the market rate, even though he gets a big options package
as part of remuneration.

[essentialinvestor] 23/3/2022 10:54

BBY looks in better shape than for many years, as their asset book is worth comfortably over £1 bn
with the support services business on top of that, their construction operation is valued at a very modest
amount given the current market cap. BBY may be worth watching.

[buywell3] 22/3/2022 21:29

The problem with a lot of construction companies is that they can take considerable time to complete

During this time material costs can rise unexpectedly and supply chain issues can add to problems and cause further delays

Clients can ask for different contract quotations at the time of tendering -- for example a fixed price contract or a cost plus uplift contract

Clients that saw the current troubles coming would imo have chosen fixed price contracts and would have scrutinized and dictated any allowed small print clauses

dyor


The picture tells the story


free stock charts from uk.advfn.com

[essentialinvestor] 14/3/2022 21:16

Yup in pretty chunky quantity.

[eigthwonder] 14/3/2022 13:28

Directors bought at end of last week too

[essentialinvestor] 14/3/2022 09:24

Anyone have a view here, bought a small amount on Friday.

[essentialinvestor] 11/3/2022 15:01

"..The risk profile continues to decrease at UK Construction, where at year end only 14% of the order book is from fixed price contracts (2020: 20%; HY 2018: 50%)..."


That looks the key.


Which may also indicate some competitors taking a bath on fixed priced
worked they declined.

[essentialinvestor] 11/3/2022 13:24

Anyone have an insight in to how they are managing to preserve margin
with labour and material and wider cost inflation hitting double digits for
this industry?.

[woodyjmw] 11/3/2022 12:34

Decent results, even UK Construction returning to profitability in second half, 9p divi should provide support.

[woodyjmw] 11/3/2022 12:34

Decent results, even UK Construction returning to profitability in second half, 9p divi should provide support.

[dekle] 10/2/2022 14:29

The £50m fine should have already been in the current share price

[scotches] 06/1/2022 09:17

Balfour Beatty ‘unusually cheap’ despite fraud woes

Balfour Beatty (BBY) has reached an agreement with the US Department of Justice (DoJ) after pleading guilty to fraud committed against the US military, and Liberum says the payout is more than expected.

Analyst Joe Brent retained his buy recommendation and target price of 360p on the stock, which closed up 0.9%, or 2.4p, at 274p on Wednesday.

The construction firm will pay £49m to the DoJ after it fraudulently claimed it had completed repairs to military housing in order to gain bonus payments.

‘Closure on the issue is welcomed, despite the consideration payable being more than we might have anticipated,’ said Brent.

‘We leave our 2021 average net cash estimate of £650m unchanged but reduce our [2022 financial year] estimate from £620m to £580m assuming that the fine will be paid in January 2022.’

In spite of the problems at Balfour Beatty, Brent said the current year 2022 price/earnings ratio of 10.2x was ‘unusually cheap given the public-private partnership portfolio and low real yields’.

[woodyjmw] 23/12/2021 22:44

Yes, I guess not as bad as it could have been and draws a line under the issue, removing some uncertainty.

[imastu pidgitaswell] 23/12/2021 16:19

Found guilty of fraud - and up goes the share price...

😳


It's all about you how spin it - see the RNS. Whereas The Times went with:



Balfour Beatty has pleaded guilty to defrauding the US military after a two-and-half year investigation by special agents of the armed forces and the FBI and has been told to return fraudulently claimed payments and pay penalties totalling nearly £50 million.

The FBI and one of America’s top federal prosecutors said the company had been greedy and that fraud and lying in a division of Balfour Beatty was widespread. They accused the subsidiary of having a “broken corporate culture” and of putting its own profits ahead of the welfare of members of the US armed services and their families.

Balfour, Britain’s largest construction company, has substantial interests in the United States that account for more than half the group’s annual revenues of £7.3 billion. These include, for much of the past decade, being the landlord of and providing property maintenance services to 55 military housing complexes around the US for tens of thousands of army, navy and airforce personnel and their families. It includes Fort Gordon in Georgia, the US centre of cybersecurity, and Fort Bliss in Texas, the US Army’s largest camp.

For the past two-and-half years, however, the company has been under investigation by federal special agents over the misappropriation of money linked to those contracts. Balfour Beatty finally admitted on Wednesday that its people had been on the fiddle and that the company had banked performance payments that it should not have claimed.

It has pleaded guilty in a Washington DC criminal court to one count of fraud, has agreed to pay back $31.8 million in restitution and has further agreed to pay $33.6 million in penalties.

The US Department of Justice said the company’s division, Balfour Beatty Communities, based in Pennsylvania, was now on a three-year “probation”. It said that the company had also agreed to the appointment of an independent compliance monitor for the next three years, a similar arrangement to that applied to Serco and G4S in the UK when they were found to have fiddled the British taxpayer.

Lisa Monaco, the US deputy attorney-general, said: “Instead of promptly repairing housing for US service members as required, Balfour Beatty Communities lied about the repairs to pocket millions of dollars in performance bonuses. This pervasive fraud was a consequence of Balfour Beatty Communities’ broken corporate culture, which valued profit over the welfare of service members.”

Paul Abbate, deputy director of the FBI, said: “In defrauding our country’s military services, [the Balfour Beatty division] took advantage of their unique position as a military housing provider and put greed and personal profit above our service members.”

The investigations found that Balfour Beatty managers had falsified documentation claiming that work had been completed in order to trigger incentive payments.

In a statement Balfour Beatty confessed to “misconduct” by its personnel and said that the wrongdoing that took place was “completely contrary to the way the company expects its people to behave”.

It is understood that two executives at the centre of the fraud and investigated by US agents have since been sacked by Balfour Beatty.

A review of its US business has also prompted Balfour Beatty to now appoint a chief compliance officer and has sent workers on ethics training courses.

Shares in Balfour Beatty rose 3 per cent, or 7½p, to 263p.

[sphere25] 09/12/2021 08:45

Fallen a long way but has it fallen too far?

Statement doesn't look as bad as the price fall suggests.

The price is trying to break the downtrend with a move higher. It is sat bang on the 50 day moving average.

The market isn't falling over itself to buy early here though, but maybe one to keep an eye on if someone does decide to buy heavy.

All imo
DYOR

[essentialinvestor] 20/10/2021 11:03

No interest rate given on the new RFC - don't like that.

[essentialinvestor] 14/10/2021 08:53

That would surprise me.

Next update may be interesting with rapidly rising costs, particular labour costs
in the construction industry.

Hope they have priced their contracts conservatively.

[dickbush] 07/10/2021 08:35

£150mil buying program runs out today. Another one coming?

[scotches] 19/8/2021 07:00

Hargreaves view.

"However, even in the good times margins in the construction sector are pitifully thin. An operating profit margin of 3% is pretty impressive in the UK, while in the US as low as 2% is good going. Such low margins leave little room for error and unfortunately Balfour, like the wider construction business, is accident prone."

"Still, we've been impressed by Balfour's ability to win, and keep hold of, business contracts during the disruption. A growing order book is not something all construction companies can boast. Quinn's more disciplined approach to managing the business also means the balance sheet is in reasonably good shape."

[bigbertie1] 18/8/2021 20:29

deckle, there was another negative. remedial work is required on concrete slabs cladding a high-rise building in London. BBY has a liability but is waiting for engineers reports to estimate the cost of work. It could vary a lot but they say maximum £50m. Expect a hit in the yearend numbers!

So yet again a construction company stumbles on fixed price contracts and high-rise cladding. Disppointing.

[dekle] 18/8/2021 08:47

Beyond me, the only negative I could find was the private property in London projects loosing money.

However I was disappointed with the dividend.

[skyship] 18/8/2021 08:33

Down 7% and zero comments! No-one holding perhaps.

I have it on my Monitor - saw the figures & statement - didn't seem so bad...

[dekle] 21/6/2021 10:23

According to my calculations so far £90m spent on buy backing shares leaving £60m to go I estimate.