Balfour Beatty half-year results 2026: guidance rises as US profits recover

Balfour Beatty has delivered a strong first half, combining higher revenue with a sharp improvement in underlying profit and another increase in shareholder returns.

The infrastructure group now expects its full-year performance to be slightly ahead of previous guidance. That upgrade was supported by rising US Buildings activity, lower losses in US Civils and strong demand for UK power transmission work.

For investors following Balfour Beatty PLC, the main attraction is not simply that profit increased. The quality of the improvement looks reasonably broad, while the £22.9 billion order book provides useful visibility beyond the current reporting period.

Balfour Beatty's key half-year figures

Metric	HY 2026	HY 2025	Change
Underlying revenue	£5,563 million	£5,150 million	8% higher
Earnings-based business PFO	£153 million	£108 million	42% higher
Group underlying PFO	£119 million	£77 million	55% higher
Underlying pre-tax profit	£139 million	£95 million	46% higher
Underlying EPS	21.7p	14.4p	51% higher
Interim dividend	4.7p	4.2p	12% higher
Order book	£22.9 billion	£19.5 billion	Higher
Average net cash	£1,616 million	£1,102 million	Higher

PFO means profit from operations before non-underlying items. Balfour Beatty uses it as a key measure of operational performance.

Revenue increased by 8% to £5.56 billion, largely because of higher volumes in US Construction. More importantly, underlying PFO from the earnings-based businesses rose by 42% to £153 million, taking their combined margin from 2.2% to 2.9%.

Underlying earnings per share increased from 14.4p to 21.7p. The share buyback helped here by reducing the weighted average share count from 509 million to 484 million, but the underlying profit improvement was the primary driver.

US Construction provides the biggest turnaround

US Construction revenue increased by 19% to £2.48 billion. The division moved from an £11 million underlying operating loss to a £22 million profit, producing a 0.9% margin.

This was driven by continued growth in US Buildings and a much-reduced loss in US Civils. Buildings accounted for 91% of the division's revenue, with demand supported by areas including data centres, aviation, healthcare, education and military housing.

Balfour Beatty contracted around $350 million of new data centre orders during the half. It has also been awarded approximately $1 billion of additional work expected to enter the order book over the next 12 months.

The US improvement matters because Civils has previously acted as a drag on performance. One troubled highways joint venture project in Texas is expected to reach final close-out shortly, although Balfour Beatty continues to pursue cost recoveries.

The recovery is encouraging, but the 0.9% divisional margin remains slim. Investors will want evidence that this progress can continue without fresh project problems appearing elsewhere.

Power transmission drives Support Services growth

Support Services was another standout performer. Revenue rose by 10% to £727 million, while underlying PFO increased by 43% to £66 million.

That lifted the margin from 6.9% to 9.1%, reflecting higher volumes and the disciplined delivery of higher-margin power transmission activities.

The UK electricity network requires substantial investment, and Balfour Beatty is already delivering work for customers including National Grid, Scottish and Southern Electricity Networks and Scottish Power.

The division's £4.0 billion order book was unchanged from the end of 2025, but that does not tell the whole story. Several power projects remain in design phases, with their full value expected to enter the order book as construction begins over the next 18 months.

UK Construction is stronger than the headline margin suggests

UK Construction revenue was broadly flat at £1.57 billion, while underlying PFO slipped from £56 million to £54 million. Its reported margin decreased from 3.6% to 3.4%.

However, the previous period included a one-off £10 million insurance recovery. Excluding that benefit, Balfour Beatty said underlying PFO increased by 17% on a like-for-like basis.

The £8.9 billion UK order book was unchanged from the end of 2025. Importantly, 85% comes from public-sector and regulated-industry clients, while 85% is on target-cost or cost-plus contractual terms. These arrangements can reduce some of the fixed-price risk associated with major construction projects.

New work included the £325 million Netherton Hub project in Aberdeenshire and a £138 million roads contract in Lincolnshire.

Gammon, Balfour Beatty's Hong Kong joint venture, was less positive. Revenue fell by 10% to £495 million and PFO declined from £17 million to £11 million. Its order book nevertheless grew by 15% to £2.3 billion.

Cash supports dividends and buybacks

Average net cash increased to £1.62 billion, compared with £1.21 billion across the 2025 financial year. Period-end recourse net cash reached £1.71 billion.

The improvement was supported by a £259 million working capital inflow, including advance receipts in US Construction and strong cash management in Support Services. These inflows are helpful, although working capital can move between reporting periods and should not automatically be treated as recurring profit.

Balfour Beatty completed £102 million of share buybacks during the half and remains on track to finish its £200 million 2026 programme by year-end. The interim dividend increased by 12% to 4.7p per share.

This combination of dividend growth and buybacks echoes the wider focus on cash-backed shareholder returns seen across recent UK results, including Serco's 2026 half-year update.

Guidance moves higher

Management now expects low double-digit percentage growth in earnings-based business PFO for 2026, slightly ahead of its previous high single-digit growth guidance.

2026 measure	Updated guidance	Previous guidance
Earnings-based business PFO growth	Low double-digit percentage	High single-digit percentage
Net finance income	£35 million to £40 million	£28 million to £32 million
Average net cash	£1.5 billion to £1.7 billion	£1.3 billion to £1.5 billion

Infrastructure Investments is still expected to report a small underlying operating loss before disposals. However, the conclusion of the US military housing compliance monitorship in June means the associated monitor and legal costs have ceased. The division is forecast to produce positive PFO of £10 million to £20 million in 2027, before disposals.

What investors should watch next

The positive case rests on operational momentum, improving US performance, power-sector demand and a large order book. The balance sheet also gives Balfour Beatty room to invest while continuing buybacks and dividend payments.

There are still risks. Construction margins remain relatively low, individual contracts can produce substantial losses, and the timing of major UK transport investment remains uncertain. Balfour Beatty also recognised a £9 million non-underlying charge after increasing its provision for Building Safety Act claims.

Overall, this was a convincing half-year update. The guidance upgrade appears supported by actual profit and cash delivery rather than optimism alone. The next test is whether US Construction can build on its recovery and whether Support Services can sustain its stronger profitability as power projects move from design into delivery.

The full figures and accompanying notes are available in the original company announcement.