We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Balfour Beatty Plc | LSE:BBY | London | Ordinary Share | GB0000961622 | ORD 50P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -2.20 | -0.61% | 356.00 | 356.60 | 357.00 | 364.40 | 351.00 | 354.00 | 1,189,840 | 16:35:03 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Engineering Services | 9.6B | 197M | 0.3628 | 9.84 | 1.94B |
From Apr 2019 to Apr 2024
TIDMBBY
RNS Number : 4434V
Balfour Beatty PLC
14 April 2021
Balfour Beatty plc (the "Company")
Notice of 2021 AGM, Forms of Proxy and Annual Report and Accounts
The Company announces that today it has made available to shareholders the following documents:
-- Notice of 2021 Annual General Meeting ("Notice of 2021 AGM");
-- Forms of Proxy for the AGM; and
-- Annual Report and Accounts for the year ended 31 December 2020 ("2020 ARA") .
The documents listed above are available on the Company's website at https://www.balfourbeatty.com/investors . Paper copies will be mailed to shareholders who have elected to receive them.
In compliance with Listing Rule 9.6.1, these documents have been submitted to the Financial Conduct Authority, and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
Format of the 2021 AGM
The Company's 2021 AGM will be held at 10.00am on Thursday 13 May 2021 at The Curve Building, Axis Business Park, Langley, Berkshire, SL3 8AG.
According to current government guidance, restrictions will still be in place on the date of the 2021 AGM that prohibit indoor group gatherings, restrict travel and mandate a policy of social distancing due to the risk of Covid-19. It is therefore currently intended that the 2021 AGM will be held as a closed meeting convened with the minimum quorum stated in the Company's Articles of Association. The Company intends to facilitate the quorum of shareholders for this meeting. All other shareholders should not attempt to attend the 2021 AGM in person, in order to protect the health and safety of fellow shareholders and our staff, and will not currently be permitted admission if they intend to do so.
As the 2021 AGM will be a closed meeting, shareholders are strongly encouraged to appoint the Chair of the meeting as their proxy to exercise their right to vote at the 2021 AGM in accordance with their instructions. Further details including how shareholders can vote by proxy and ask questions in advance of the meeting can be found in the Notice of 2021 AGM. The Company will continue to closely monitor government guidance and legislation in relation to Covid-19 and any changes to the arrangements will be notified to shareholders through our website.
2020 ARA
A condensed set of financial statements were appended to the Company's full year results announcement, issued on 10 March 2021, which included an indication of important events that occurred during the year. That information, together with the information set out in the Appendix to this announcement regarding the Company's principal risks and uncertainties, related party transactions and directors' responsibility statement, as extracted from the 2020 ARA, constitute regulated information which is to be communicated to the market in full unedited text through a Regulatory Information Service in accordance with DTR 6.3.5R.
Page and note references within the Appendix below refer to page numbers in the 2020 ARA. To view the full year results announcement, please visit the Company's website at https://www.balfourbeatty.com/investors / .
This material should be read in conjunction with, and is not a substitute for, the full 2020 ARA.
General enquiries:
Contact and telephone number for queries /
Duly authorised officer of issuer responsible for making notification:
Tracey Wood, Group General Counsel and Company Secretary
Tel. +44 (0)20 7216 6800
Analyst/investor enquiries:
Angus Barry
Tel. +44 (0)7966 281 635
angus.barry@balfourbeatty.com
Media enquiries:
Antonia Walton
Tel. +44 (0) 7966 929 633
antonia.walton@balfourbeatty.com
Notes to editors:
-- Balfour Beatty is a leading international infrastructure group with 26,000 employees driving the delivery of powerful new solutions, shaping thinking, creating skylines and inspiring a new generation of talent to be the change-makers of tomorrow.
-- We finance, develop, build, maintain and operate the increasingly complex and critical infrastructure that supports national economies and deliver projects at the heart of local communities.
-- Over the last 112 years we have created iconic buildings and infrastructure all over the world including: the GBP1.5 billion A14 improvement scheme - Britain's biggest road project; Hong Kong's HK$5.5 billion world-class harbour theatre project for the West Kowloon Cultural District Authority; and the 12.5 mile $429 million North Metro Commuter Rail line in Colorado, US.
APPIX
1) Principal risks
Removing uncertainty through understanding
Balfour Beatty's decision-making is centred on a comprehensive and detailed understanding of the exposures faced by the organisation. The identification of risks to achieving business and strategic objectives, alongside the use of detailed analysis to inform and prioritise responses, remains key to balancing risk taken in line with risk appetite. The principal and emerging risks are mapped to strategic business plans to ensure a comprehensive coverage of risks, allowing the Board to undertake a robust assessment of the potential exposures faced by the Group and whether these represent new, increased or decreased threats and the level of response required to manage them. The risk profile comprises both interconnected and discrete risks at strategic, operational and project level and focuses on understanding the worst-case scenarios that could threaten the Group's strategy and business model. As a result, changes in the Group's risk profile and movements in some of the principal risks have been identified and are described on pages 94 to 101.
Description and impact Causes Mitigation ----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ---------------- 1 Health and safety ----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ---------------- The Group works on Some common themes Balfour Beatty's Zero Owner and delivers significant, which could drive Harm Strategy and its Safety and complex and potentially health and safety supporting policies and Sustainability hazardous projects risks include: procedures remain embedded Committee which require continuous * inadequate risk identification/assessment; and act as a key control Risk movement monitoring and management in managing the risk. - of health and safety The strategy and associated No movement risks. * lack of competence; action plans are reviewed Well-established What impact it might and monitored by management controls and have and external accreditation mitigations Failure to manage * processes that fail to deliver risk elimination or bodies. continue to these risks presents mitigation; Experienced and competent remain in place the potential for health and safety professionals throughout the significant harm, provide advice and support, Group and including fatal or * lack of clear safety leadership, impacting broader monitor culture and undertake represent life-changing injuries safety culture; regular reviews. a stable control to employees, subcontractor The Safety and Sustainability environment. staff, third parties Committee of the Board Multiple or members of the * ineffective management of subcontractors, JV partners and business Health and failures public. It also presents and other third parties; Safety executive leadership within this
Hot Features
Premium
the threat of potential teams, meet regularly environment
criminal prosecutions, throughout the year to would be
significant fines, * failure to cascade and follow Health and Safety capture lessons learned required
debarring from contract procedures; and/or and develop a consistent for the risk
bidding and reputational approach to health and to be realised.
damage. safety best practice.
* lack of focus on the wellbeing and mental health of Training programmes (including
staff faced by daily work and life pressures. behavioural) are in operation
across the business.
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
2 Managing Commercial
Terms
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
The Group delivers Key causes that could The Group Tender and Investment Owner
high profile, complex drive this risk include: Committee reviews and Group Tender
projects that can * lack of clearly defined bid strategy; challenges all proposals and Investment
often carry specialised in line with minimum commercial Committee
deliverables together expectations.
with intricate, multifaceted * misalignment between Balfour Beatty and client Defined delegated authority Risk movement
and sometimes onerous approach; levels are in place for -
commercial terms. approving all tenders No movement
Delivering contract and infrastructure investments. Current controls
obligations alongside * working with a new or unknown customer with no known Customer adoption of the champion a more
the supply chain, established relationship; UK Government Construction collaborative
for Balfour Beatty's Playbook steers an approach approach with
customers, whilst towards increased collaboration, customers to
protecting the interests * supply chain lacking the capability to accept and which results in reduced manage the risk.
of all parties, maintaining manage back-to-back terms, resulting in increased risk, and an increased Controls to
a profitable and risk carried by Balfour Beatty; focus on quality of bid mitigate the
sustainable order rather than being solely likelihood and
book, and delivering cost focused. impact by
stakeholder value, * failure to engage in an early collaborative approach A 'getting left early' preventing
can pose an element with the customer; approach adopted prior the Group from
of risk. to the procurement process bidding for
What impact it might enables influence over unsustainable
have * lack of balanced approach to allocation or sharing of contracting and procurement work and
Failure to fully risk; and/or model to two-stage tender, therefore
understand or manage supports an early collaborative, limiting any
the application of solution-based approach potential
commercial terms * lack of early identification of a contracting with customers and minimises exposure,
across contracts strategy between all parties. risk on both sides. remain key.
can result in the A wide and ongoing range Following a
use of valued time of work winning initiatives review of the
and associated cost (including Cash is our Work Winning
of resource to manage Compass, High Value Selling risk, this has
any disputes, potential and the Win Business Leadership now been
losses or reduction community of practice) refocused
in profits and damage are in place across the on understanding
to relationships Group to drive increased and managing
with key customers commercial and customer commercial
and supply chain awareness and further terms.
partners. embed an understanding
Failure to effectively of expectations on margins
engage and collaborate and cost.
with customers and The Gateway review process
supply chain around highlights key commercial
managing terms could risks closely aligned
also result in the to Group Circles of Risk
Group opting out to ensure adequate qualification
of certain works and mitigation of key
or even may limit exposures.
access to targeted Monthly business reviews
markets in the future. pick up any early indicators
with potential for disputes
arising on contracts,
including across the subcontractor
base.
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
3 Project delivery
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
Failure to deliver Failure to implement, A continued focus on identifying Owner
projects in line maintain and challenge and reporting risks, including Group management
with customer expectations operational and commercial planning, programme accuracy Risk movement
and required specifications, controls (as detailed of cost and cash forecasting -
on time and on budget within checklists and resource reviews is No movement
and minimise the at Gateway reviews) maintained through the Consistent
risk of increased allowing: Gated Business Lifecycle. application
costs, delay related * unrealistic programming targets; Early engagement of integrated of the Group's
damages and defect work winning and project reporting
liabilities. delivery teams across systems
What impact it might * inadequate resource (people, plant and materials) or the Gateway processes and diligent
have competency of resource; to ensure customer expectations use of short
Failure to manage are understood and realistic. interval control
and/or deliver against Deployment and ongoing processes remain
customer expectations, * lack of comprehensive understanding of contract monitoring of strong commercial in place across
scope specifications obligations; management and contract all stages of
and key deliverables administration processes project
in line with schedule through the project lifecycle. delivery,
and budget could * unrealistic progress assessments and cost to complete Optimal scheduling of providing
result in issues judgements which could arise due to poor training, key staff and associated greater
such as design issues, lack of supervision, lack of accountability or fear competencies within project certainty of
contract disputes, of reporting bad news; delivery teams and senior operational
rejected claims, management, with ongoing outcomes.
liquidated damages, and focused training. However
cost overruns and * overly optimistic claim recovery assumptions; The site mobilisation it is
failure to achieve hub facilitates early acknowledged
anticipated customer and effective start-up that continued
savings which in * incomplete visibility and appreciation of scale of on site. verification
turn could reduce commercial judgements; Use of innovative and of the
the Group's profitability cost-effective engineering effectiveness
and damage its reputation. and technical solutions of controls
The Group may also * failings in administering the contract terms to (including the vision remains key
be exposed to long-term safeguard or protect future claims, change orders and for 25% offsite fabrication to managing
obligations including extensions of time (EOTs); and/or by 2025). this risk, hence
litigation and costs Drive for defect-free no reduction
to rectify defective delivery including digital in risk
or unsafe work. * poor management and selection of subcontractors. progressive assurance exposure.
Delivery failure of project delivery.
on a high-profile Professional indemnity
project could result Customer intervention cover in place to provide
in significant reputational and additional pressure further financial safeguards.
damage, debarring to complete a project Prequalification and competency/capacity
from future work may also contribute verification of supply
and significant associated to realisation of chain partners, with performance
costs of rectification this risk. of subcontractors and
or dispute resolution. suppliers monitored closely
throughout the project
lifecycle.
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
4 Joint ventures
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
Failure to implement The risk could be The Group Tender and Investment Owner
robust controls around realised through: Committee process also Group Tender
the selection of * ineffective assessment of potential JV partners applies to all joint venture and Investment
joint venture (JV) including liquidity, capacity and capability; proposals. Committee
partners, define The Group's primary course Risk movement
a clear governance is to self-deliver projects -
structure or establish * failure to ensure 'fit for purpose' terms with the where possible rather No movement
a 'one team' culture right JV partner; than as part of a JV, Whilst there
may result in failure whilst recognising that has been
to deliver expected establishing the right significant
returns and minimise * lack of clarity of the delegated levels of authority partnership can be an improvement
the risk of unexpected between partners; opportunity to deliver in the process
liabilities. work. for entering
What impact it might Appointment of an appropriately JVs, the
have * delayed and fettered decision-making process between constituted JV Board to longer-term
Not selecting the partners; act as the main governance effect of this
right JV partner vehicle for the Group. on the risk
who aligns to Balfour The Gated Business Lifecycle remains to be
Beatty's culture * segregation of management systems (financial and provides governance over seen - ongoing
and values could operational); the selection of JV partners, exposure
result in a mismatch and highlights partner continues.
of partner objectives, related risks, closely
which flows through * lack of understanding of contract requirements and aligned to Group Circles
to ineffective delivery expectations; of Risk including those
of contract requirements related to capacity, capability,
and a misalignment previous experience with
in approach resulting * lack of oversight over JV reporting and application the Group and liquidity.
in a significant of processes implemented across the project; and/or Experienced project directors
impact to profitability are appointed to manage
and reputational the JV and provide an
damage. * failure to align Balfour Beatty and JV partner ongoing assessment of
The failure of a cultures, values and practices. operational delivery risk.
JV partner may expose Good practice, including
the Group to increased the use of joint reporting
resourcing costs systems where appropriate,
and ongoing liability, is shared between all
warranty and insurance partners to embed the
risks. Group's expectations and
Disputes with JV culture throughout JV
partners could impact delivery teams.
the Group's ability Balfour Beatty monitors
to operate successfully the performance of its
and/or expand within JV partners throughout
its chosen markets. the lifecycle of a project.
Failure to share
and meet the Group's
health and safety
management expectations
could result in increased
potential for injury
and/or fatality.
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
5 Data protection
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
The Group is exposed A data breach may HR Data Protection Coordinators Owner
to a significant be experienced due and Data Privacy Champions Group management
data breach that to: remain embedded throughout Risk movement
results in a breach * ineffective training/lack of competency; the business to ensure V
of the General Data breaches are reported Decreased
Protection Regulation promptly and risks are Implementation
(GDPR). * third-party error; appropriately escalated of increased
What impact it might to the Group Data Protection controls since
have Officer (GDPO) for consideration the introduction
Crystallisation of * system failure, lack of system capability or system and assessment. of GDPR has
this risk has the breach; Senior Information Risk reduced overall
potential for: Officer acts as Executive exposure.
* legal and regulatory proceedings, investigations or Committee representative
disputes and associated costs; * malicious act (internal/external); for data protection.
All employees undertake
annual training in data
* operational impact (disruption to business as usual); * lack of awareness; protection and information
security management.
Implementation of standardised
* costs and losses, fines and penalties; * unforeseen or sudden increase in data handling; systems (including One
Trust for managing data
subject access requests
* reputational harm and potential debarment; and * human error; and/or (DSAR) and incidents)
and appropriate policies,
procedures and standard
* data subject rights process failure. * lack of corporate accountability. templates driving a culture
of privacy across the
organisation.
Increased engagement with
Site of the Future teams
allows for early involvement
in IT initiatives from
a privacy and data governance
perspective.
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
6 Cybersecurity
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
A failure to protect Several internal The risk is managed via Owner
key Company and employee and external factors the following controls: Group management
data or other confidential could contribute * network and endpoint protection, encryption, patching Risk movement
information resulting to the realisation and data back-up; -
from a breach of of this risk such No movement
system security. as: Whilst a
What impact it might * poor internal governance; * awareness training with mandated annual refresher in potential
have place across all users; impact increase
Realisation of this in line with
risk could result * failure to embed preventative culture; increased
in: * employee vetting; attempts
* reputational harm (loss of market and customer is being seen
confidence); * increased exposure to phishing attacks and ransomware more broadly
due to increased use of personal devices and remote * data governance framework regularly reviewed, and across other
working; supported by policies and certifications; sectors and
* potential fines and prosecution; organisations,
increased
* lack of retention policy applied to data; * incident management feedback mechanism (embeds resilience
* loss of intellectual property and competitive lessons learned); as a result
advantage; and of improved
* operational failure. controls and
* partner and supplier controls in place including ongoing
* operational impact restricting ability to carry out vendor risk management assessments and established governance
business critical activities (disruption to business * inconsistent approach to data security with joint relationships with external security authorities; has meant no
as usual). venture / external partners; material change
to this risk.
* roll out of One Drive to all users across the estate,
* increased use of cloud services without equivalent enabling secure data storage in Microsoft cloud;
investment in modern threat prevention; and/or
* infoSec actively monitoring for security incidents
* cyber attack. and remediating where necessary;
* privileged access to all core systems subject to
multi-factor authentication;
* systems run security agents for additional (24x7)
monitoring; and
* legacy operating systems removed or minimised,
including upgrade and removal of employee legacy
mobile devices.
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
7 People and talent
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
Inability to attract A failure to effectively Providing a positive working Owner
and retain the required mitigate the Group's environment to support The Board
levels of skilled people risks may the development of its Risk movement
and competent staff arise through: employees has been central -
and key talent to * overbidding or ineffective workload and location to Build to Last. No movement
deliver project commitments scheduling; Specific controls to mitigate Through Build
and meet the Group's this risk include: to Last, Balfour
objectives. * implementation of HR strategy and plan and associated Beatty has
What impact it might * overheating of market causing significant increase in measurement of KPIs to inform decision making against created
have demand or competition for people, specifically in budgets; a culture with
Failure to recruit certain sectors and regions; strong people
and retain appropriately policies and
skilled people or * a focus on strategic workforce planning protocol to processes which
grow in-house talent * lack of visibility of long-term pipeline or perceived prevent resource conflicts; continue to
could harm the Group's career progression resulting in existing workforce mitigate this
ability to win or leaving the Group or sector; risk.
perform specific * work winning and project delivery aligned to internal The Group will
contracts, manage and external recruitment activities, with early monitor the
delivery cost increases, * inability to recruit and retain strong performers; review of people and resourcing needs via GBL to impact that
grow business and/or ensure adequate capability and capacity to deliver any delays to
meet strategic objectives work prior to bidding; strategic
including acquisition * failure to maintain a culture of pride and advocacy projects
of future order book. across the workforce; has on the
A high level of staff * competency frameworks within core job families availability
turnover or low employee identify and support the development of key knowledge of skilled
engagement could * ineffective and or lack of adequate investment and , resource.
result in a loss decision making in the development of existing skills skills and expertise;
of competency, reducing and capabilities;
business confidence
within the market, * recruitment and retention rates are measured and
a loss of stakeholder * lack of a diverse workforce; and/or regularly reviewed across all parts of the business,
confidence and an with succession plans identified for core
inability to drive disciplines;
business growth or * issues throughout labour supply chain including
improvements. impact of Brexit/ onerous immigration controls.
* annual PPR (people and talent reviews), with regular
reviews of remuneration and incentive arrangements to
ensure they are appropriate to help the Group attract
,
motivate and retain key employees;
* Group-wide employee engagement surveys are undertaken
to measure engagement and appropriate actions are
developed and communicated;
* the Balfour Beatty Academy has been established in
the UK to support professional and personal
development in line with role requirements;
* Training Needs Analysis and competency tools (COMEA)
identifies role capability requirements and
highlights development gaps to inform investment
decision making;
* strong employee communication channels are in place
celebrating individual, business and Group-level
successes and increasing visibility of future
pipeline and opportunities;
* affinity networks established to create a diverse and
inclusive working environment; and
* emerging talent is supported by strong graduate,
apprenticeship, trainee and industrial
placement/internship schemes.
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
8 Sustaining focus on build to last strategy
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The Group does not Failure to deliver Ensuring Build to Last Owner
sustain and build and/or demonstrate continues to deliver and The Board
upon the strong foundation sustained focus and demonstrate value is a Risk movement
and culture created momentum could arise strategic priority for V
through its Build from: the Group and is led by Decreased
to Last strategy. * complacency and/or localised adaptations within core the Group Chief Executive. The recent
What impact it might disciplines or siloed cultures; Controls include: launch
have * continuous measurement and reporting of KPIs aligned of the refreshed
Inconsistency in to Lean (cash flow and profit from operations), Cultural
working practices * ineffective communication and reinforcement of Expert (employee engagement), Trusted (customer framework
and siloed cultures messaging through a lack of leadership; satisfaction), Safe (Zero Harm) and Sustainable and associated
could drive inefficiencies (carbon emissions) within each business unit; values and
including increased behaviours
costs and operational * inadequate resourcing (financial, physical assets and has strengthened
errors resulting people); * refreshed cultural framework under Build to Last with and reinforced
in reputational harm associated engagement and embedment in systems and Build to Last
impacting all of processes aligning the UK and US under one unified principles and
the Group's stakeholders * new systems and processes being used without cultural framework and reinforcing expected values disciplines
as well as an impact appropriate controls being in place and/or tested; and behaviours across the
on the Group's ability and /or business
to deliver sustainable - improved
profitable growth. * senior leadership team well experienced in delivering oversight
* new people joining the organisation (including in business transformation successfully with clear and via regular
leadership roles). frequent senior leadership engagement across the reporting and
businesses; discussion
around
KPIs has reduced
* upskilling, training and development initiatives at risk overall.
key levels throughout the business to reinforce Build Continuous
to Last principles in key job families i.e. messaging
commercial, project management, engineering etc; and and
reinforcement
across all
* induction, recognition and PDR approach heavily employee
weighted around Build to Last principles and culture touch points
including expected values and behaviours. remains key.
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
9 Financial strength
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
The Group's inability Failure to manage The Group continues to Owner
to maintain the financial financial risks, operate within a low financial The Board
strength required including forecasting risk environment. On 1 Risk movement
to operate its business material exposures, July 2020 the Group redeemed -
and deliver its objectives. and the financial in full its preference No movement
What impact it might resources of the shares for GBP112m, reflecting Controls within
have Group that underpin its continued strong liquidity Finance and
Failure to protect its ability to: position. Treasury
and effectively deliver * meet ongoing liquidity obligations so that it remains The Group operates with functions
the required financial a going concern; and/or a centralised Treasury continue to
strength will mean function that is responsible demonstrate
the Group: for managing key financial a clear ability
* fails to meet financial covenant tests, as set out in * meet financial covenants as set out in financing risks, cash resources to manage
its financing facility agreements, leading to a facility agreements. and the availability of existing
default event if not remedied within a specific grace liquidity and credit capacity. and anticipated
period; The Group maintains significant risk.
undrawn term committed
bank facilities with a
* fails to pass the required tests that allow it to banking group of high
continue to use the going concern basis of accounting credit quality to underpin
in preparing its financial statements; the liquidity requirements
of the Group.
The Group maintains significant
* loses the confidence of its chosen markets; and/or bank and surety bonding
facilities to deliver
trade finance requirements
* loses the ability to compete for key long-term of the Group on an ongoing
contracts that are critical to its viability and basis.
delivery of its long-term objectives. The Group operates standardised
reporting, forecasting
and budgeting financial
processes. This allows
monitoring of the impact
of business decisions
on financial performance
over future time horizons.
Assets from the Investments
portfolio can be sold
to generate cash.
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
10 Supply chain
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
Supply chain partners Crystallisation of The Group aims to develop Owner
fail to meet the capacity, competency long-term relationships Group management
Group's operational and stability risks with key subcontractors, Risk movement
expectations and to the Group's supply working closely with them -
requirements in relation chain may arise through: to understand their operations No movement
to capacity, competency, * lack of capacity or failing to retain subcontractors and dependencies. This The Group
quality, financial in a buoyant market over-reliance on a limited includes relationship continues
stability, safety, number of suppliers or a failure of key supplier mapping with strategic to be diligent
environmental, social relationships; suppliers, lessons learned in its
and ethical. from previous projects assessment
What impact it might together and briefing of its supply
have * failure to embed the Group's expectations within the on order book requirements. chain. The
Failure in delivery procurement process; The Group has undertaken reduction
by, or management significant work to identify in the number
of a subcontractor and understand who its of active
or supplier, would * inadequate assessment of supply chain partner key supply chain partners suppliers
result in the Group capabilities, capacity and process (including are, reducing the number and increased
becoming involved liquidity, quality, safety, ethics, materials to 40 known core partnerships. system solutions
in disputes, having stewardship, child labour, forced labour and modern The risk management framework to track
to find a replacement slavery); and the Gateway review performance
or undertaking the process allow for early and metrics
task itself. This (Gates 1-4) and ongoing throughout
could result in delays, * lack of supplier resilience (due to economic (Gate 6) assessment of operational
business disruption, uncertainty including Brexit or any lagging effects the appropriateness of delivery improve
additional costs seen as a result of COVID-19 and artificial 'propping resource allocation and oversight.
or a reduction in up' from the furlough scheme); dependencies and development
quality/increased of procurement strategies.
defects owing to Pre-qualification accreditation
lack of expertise * failure to accurately assess project resource in place for core suppliers
or competency. requirements and key deliverables; (validated in Gates 1-3),
Mistreatment of suppliers, with oversight of supplier
subcontractors and metrics and overall 'health'.
their staff, or poor * impact from Brexit including increased tariffs and Contingency plans address
ethical standards delays; potential subcontractor
in the supply chain, failure, including replacement
could lead to legal supplier list.
proceedings, investigations * lack of adequate oversight, supervision or management A central database tracks
or disputes resulting during delivery; and/or individual subcontractor
in business disruption, scoring in relation to
losses, fines and capacity, compliance,
penalties, reputational * unethical treatment of the supply chain. performance and financial
damage and debarment. health.
The Group obtains project
retentions, bonds and/or
letters of credit from
subcontractors, where
appropriate to mitigate
the impact of any insolvency.
Suppliers and subcontractors
reviewed for third-party
suitability compliance
via PAS 91 Assessment
(Industry Standard).
Group-wide Code of Conduct
and Supplier Code of Conduct,
targeted training programmes
and related policies and
procedures in place.
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
11 code of conduct compliance
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Failure to comply Failure to comply A Group-wide Code of Conduct Owner
with the Code of with the Code of and Supplier Code of Conduct, The Board
Conduct across the Conduct and Balfour and related policies, Risk movement
Group including employees, Beatty values could procedures and training V
JV partners, and arise from: are in place, promoted, Decreased
within the supply * failure to adopt a risk-based approach; monitored and assessed The Business
chain. by the Business Integrity Integrity
What impact it might function. function
have * failure to establish appropriate corporate culture; The function provides continues to
Failure to comply business integrity reports actively promote
with the Code of to the Board biannually the required
Conduct and Balfour * failure to embed the Company's values and behaviours and has its full support. behaviours and
Beatty values could through the organisation; Each business unit, supported learning tools
leave the Group exposed by the Business Integrity to
to: function, is responsible comprehensively
* instances of bribery and corruption; * lack of effective training programme and compliance for embedding the Code support the
monitoring; of Conduct and the Company's Group's conduct
values and behaviours and compliance
* fraud, deception, false claims or false accounting; within its operations. objectives.
* failure to have a robust testing and monitoring The Group has a range The risk is
programme in place; of operational controls assessed as
* unfair competition practices; (commercial, including having reduced
procurement, due diligence due to the
* lack of appropriate whistle blowing processes and risk assessment) that consistent
* human rights abuses, such as child and other labour including ensuring awareness of such outlets across are designed to identify application
standards generally, illegal workers, human the organisation; and/or and manage risks internally of these
trafficking and modern slavery; and with third parties. controls.
An independent third-party
* deliberate or reckless non-compliance. whistleblowing helpline
* unethical treatment of and by the supply chain; and dedicated email contact
and/or are in place and actively
promoted. All in-scope
complaints are independently
* ethics and values being compromised as a result of investigated by the Business
commercial pressures. Integrity function and
appropriate action is
taken, where necessary.
Failures could result Balfour Beatty works with
in legal proceedings a limited number of agents,
(including prosecution all of whom are, in addition
under the UK Bribery to the Group's due diligence
Act), investigations and approval process,
or disputes resulting subject to specific contractual
in business disruption, clauses, policies and
losses, fines and agreements.
penalties, reputational Use of a central database
damage and debarment. to track supplier and
subcontractor performance
history providing insight
into their internal operating
processes, governance
and values.
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
12 Legal and regulatory
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
The Group does not A failure to recognise The Group monitors and Owner
respond to any change or adapt to potential responds to tax, legal The Board
in relevant legal, impacts arising from and regulatory developments Risk movement
tax and regulatory changes in applicable and requirements in the -
requirements in a laws affecting the territories in which it No movement
timely manner. Group's businesses operates. Unforeseen
What impact it might may result from: Changes in the law and exposure
have * lack of awareness of any changes in law or the requirements of them to legal and
The Group could face regulations made; are clearly cascaded to regulatory
legal proceedings, all affected businesses. change
investigations or Local legal and regulatory is considered
disputes resulting * ineffective communication of the requirements across frameworks are considered extremely
in business disruption, relevant business units; and/or as part of any decision unlikely-
losses, fines and to conduct business in the controls
penalties, reputational a new territory. embedded across
damage and exclusion entering into new Appropriate and responsive the Group are
from bidding. markets and/ or sections policies, procedures, considered
Such action could with limited expertise training and risk management effective
also impact upon and due diligence. processes are in place in managing
the valuation of throughout the business. this risk.
assets within the
affected territory
as well as have an
impact on shareholder
confidence.
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
13 Legacy pension liabilities
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The Group is exposed The Group is unable The Group constructively Owner
to and must therefore to ensure that the and regularly engages The Board
effectively manage trustees of the pension with the trustees of the Risk movement
significant defined funds react effectively pension funds to ensure -
benefit pension risks. to or manage: that they are taking appropriate No movement
What impact it might * changes in interest rates or outlook for inflation; advice and the funds' Triennial
have assets and liabilities funding
Failure to manage are being managed appropriately. review of the
these risks adequately * an increase in life expectancies; This includes quarterly main UK fund
could lead to the performance reporting was completed
Group being exposed and investment committee in January 2020.
to significant additional * regulatory intervention or legislative change; meetings in which the Diverse
liabilities due to Company is represented. investment
increased pension The funding and investment portfolio
deficits. * prudent funding assumptions; and/or arrangements of the pension remains
This has the potential funds are subject to an in place, with
to affect the ongoing in-depth triennial valuation regular review
sustainability of * investment performance of the funds' assets. and funding review with on the trade
the Group as well regular monitoring in off between
as incur reputational years between. risk and cost.
harm. The Group's main UK fund No change in
has hedged in excess of risk.
80% of its exposure to
interest rate and inflation
movements.
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
14 Economic uncertainty
----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
The effects of national Potentially negative The Group primarily operates Owner
or market trends impacts related to across three geographies The Board
including political the effects of: (UK, US and Hong Kong) Risk movement
or regulatory change, * customers postponing, reducing or changing and three sectors (Construction -
may cause customers expenditure plans including any delays in funding or Services, Support Services No movement
to re-evaluate existing planning associated with COVID-19; and Infrastructure Investments). Whilst there
or future infrastructure This balanced portfolio has been some
expenditure and the of projects provides resilience shorter-term
procurement of services. * wider than expected fluctuations in inflation; and stability as the Group movement seen,
It may also lead is less exposed to a downturn including
to changes in the in a single geography opportunities
price and availability * lagging effects from Brexit - e.g. inflation, exits or sector. associated with
of labour and products. from market or lack of UK investment having a The Group continues to government
What impact it might knock-on effect; actively monitor market infrastructure
have trends and potential impacts. spend, the
Any significant delay A well-established cross-functional longer-term
or reduction in the * increased competition (e.g. in the UK from foreign Brexit working group remains outlook remains
level of customer investors acquiring competitors); in place following the uncertain. spending or investment end of the transition plans could adversely period. impact the Group's * political change in both the UK and the US (new US The financial solvency strategy and order administration may have potential impact on Federal and strength of counterparties book, reduce revenue spend); is always considered before or profitability contracts are signed and in the near or medium assessments are updated term, and negatively * increased supply chain risks (e.g. solvency, people and reviewed whenever impact the longer-term and materials); and/or possible during the project viability of the lifecycle. The business Group. also seeks to ensure that Restrictions on the * reduced revenue or pressure on margins. it is not over-reliant availability of skilled on any one counterparty. labour and competitively The annual review of market priced materials forecasts continues to could lead to increased remain a core part of costs and hence potentially the Group's Budget and a devaluation of Plan processes, and a the business. focus on medium-term market Financial failure outlook is considered of a customer, including and presented by each any government or Strategic Business Unit. public sector body, could result in increased financial exposure to counterparty risk. ----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------
Other risks
Climate change
Whilst climate change is not currently considered to be a principal risk to the business, it has been included as a risk on the Group Risk Register in 2020. The establishment of a sustainability specific functional risk register ensures the identification and management of climate related risks at a granular level to inform any movement or assessment at Group level.
Climate change increasing the intensity and frequency of weather events, infrastructure being deemed incompatible with targets and tightening of environmental legislation are identified as some the key drivers of the risk. It is acknowledged that whilst there remains risk associated with climate change to the Group's business, it also presents a significant opportunity as Balfour Beatty works alongside clients to be part of the solution.
Further commentary on the potential impacts of climate change and Balfour Beatty's approach to managing them is set out in the sustainability section on pages 55 to 70. Climate change risk is on pages 63 and 64.
Brexit
Following the end of the UK's transition period on 31 December 2020, which ended previous exposures associated with the prolonged uncertainty around the terms of exit, the Group risk register no longer captures Brexit as a stand-alone risk. Any ongoing potential impacts or factors associated with Brexit are reflected as part of broader Group risks around supply chain and economic uncertainty.
Common industry-wide risks
In parallel with those principal and emerging risks identified and managed by the Group, Balfour Beatty faces significant risks and uncertainties that are prevalent to many companies - including financial and treasury, communications and marketing, regulatory reporting, information management, business continuity and disaster recovery, and general hazard risks.
2) Related party transactions
Joint ventures and associates
The Group has contracted with, provided services to, and received management fees from, certain joint ventures and associates amounting to GBP345m (2019: GBP334m). These transactions occurred in the normal course of business at market rates and terms. In addition, the Group procured equipment and labour on behalf of certain joint ventures and associates which were recharged at cost with no mark-up. The amounts due from or to joint ventures and associates at the reporting date are disclosed in Notes 24 and 25 respectively.
Transactions with non-Group members
The Group also entered into transactions and had amounts outstanding with related parties which are not members of the Group as set out below. These companies were related parties as they are or were controlled or jointly controlled by a non-executive director of Balfour Beatty plc.
2020 2019
GBPm GBPm
------------------------------- ----- -----
Sale of goods and services
Anglian Water Group Ltd(+) 5 19
URENCO Ltd - 2
Purchase of goods and services
Anchor QEA, LLC 1 -
------------------------------- ----- -----
+ Anglian Water Group Ltd ceased to be a related party of the Group on 31 March 2020 following the retirement of Stephen Billingham as chairman from the board of Anglian Water. The sales of goods and services to Anglian Water Group Ltd represents the sales carried out in periods up until his retirement.
All transactions with these related parties were conducted on normal commercial terms, equivalent to those conducted with external parties. At 31 December 2020, there were no amounts owed by or to these related parties (2019: GBPnil) and no guarantees have been given or received and no expense has been recognised in either year for bad or doubtful debts in respect of amounts owed by related parties.
Compensation of key management personnel of the Company
2020 2019
GBPm GBPm
--------------------- ----- -----
Short-term benefits 2.610 3.034
Share-based payments 1.278 1.314
--------------------- ----- -----
3.888 4.348
--------------------- ----- -----
Key management personnel comprise the executive Directors who are directly responsible for the Group's activities and the non-executive Directors. The compensation included above is in respect of the period of the year during which the individuals were Directors. Further details of Directors' emoluments, post-employment benefits and interests are set out in the Remuneration report on pages 134 to 150.
3) Statement of Directors' responsibilities
The Directors are responsible for preparing the Annual Report and the Group and parent Company financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and parent Company financial statements for each financial year. Under that law they are required to prepare the Group financial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and applicable law and have elected to prepare the parent Company financial statements in accordance with UK accounting standards and applicable law, including FRS 101 Reduced Disclosure Framework.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent Company and of the Group's profit or loss for that period. In preparing each of the Group and parent Company financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgements and estimates that are reasonable, relevant, reliable and prudent;
-- for the Group financial statements, state whether they have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and, as regards the Group financial statements, International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union (IFRSs as adopted by the EU);
-- for the parent Company financial statements, state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the parent Company financial statements;
-- assess the Group and parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
-- use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic report, Directors' report, Directors' Remuneration report and Corporate governance statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Balfour Beatty plc's Legal Entity Identifier is CT4UIJ3TUKGYYHMENQ17.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
END
ACSUSSWRAWUSARR
(END) Dow Jones Newswires
April 14, 2021 05:00 ET (09:00 GMT)
1 Year Balfour Beatty Chart |
1 Month Balfour Beatty Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
