Balfour Beatty 
BBY The UK expects higher profits from its core infrastructure businesses this year, the company's chief executive said, with results driven by faster-than-expected activity in the UK energy sector and a recovery in US orders.
The company's shares were trading about 9% higher at 11:52 GMT on Wednesday, outperforming the FTSE 250 (.FTMC), helped in part by plans to return more cash to shareholders through share buybacks and dividends.
Underlying profit from Balfour's ( FOB ) operations rose 2% to 236 million pounds ($302 million) in 2023 from its profit-based business, which excludes its investment portfolio.
The London-based company did not specify how much that profit would grow in 2024, but Chief Executive Leo Quinn told Reuters that operating recovery in the U.S. and U.K. would boost results.
“We're seeing exchange growth, growth in network de-risking and the ASTI program, which we thought would be delayed over the next three to five years, is accelerating,” Quinn said.
The UK's Accelerated Transmission Strategic Investment (ASTI) framework funds large offshore electricity transmission projects, with incentives for the timely delivery of projects.
The UK's Balfour nuclear projects, Sizewell C and Hinckley Point, are progressing well, and measures related to energy security and net zero carbon are accelerating, Quinn added.
Balfour's forecast suggests that whoever wins the next UK general election will benefit from the company's focus on clean, locally produced energy, AJ Bell's chief investment officer Russ Mold wrote in a note.
While Balfour's UK business includes national projects such as motorways, transshipment and nuclear power plants, its US operations are mostly commercial construction.
Quinn said Balfour was getting firm orders for US projects last year as the technology crisis eased and interest rates were low.
The UK and US construction segments account for 29% and 22% respectively of Balfour's baseline 2023 PFO.
($1 = 0.7819 pounds)
