Balfour Beatty has raised its full-year profit guidance after strong activity in key UK and US markets, with the contractor forecasting a double-digit percentage increase in earnings for 2026.
The UK’s largest contractor said workloads in its UK power business increased by 24% during the first half of the year, while income from its US buildings division, which includes data centre construction, rose by 19%. Group revenue for the six months to June increased by 8% to £5.6bn, while pre-tax profit was £129m, compared with £132m for the same period last year.
Chief executive Philip Hoare highlighted the strength of the UK power market, where Balfour Beatty recently secured a £325m power transmission project in Scotland, alongside continued growth in its US buildings business. Data centres remain a particularly important part of the US operation, with Balfour Beatty having worked in the market for around two decades.
The contractor has traditionally concentrated its US data centre activity in the north-west of the country, although Hoare said its reach was now expanding into other parts of the US. Despite the strength of the sector, Balfour Beatty does not undertake data centre construction in the UK or Europe, with Hoare saying margins in those markets were not sufficiently attractive.
“It’s quite competitive and I’m not keen on entering into low margins.”
Hoare also expects activity in the UK transport sector to change in the coming years, with workloads likely to move away from capital expenditure towards maintenance. As a result, he expects growth in the sector to remain broadly flat.
Balfour Beatty continues to work on major UK transport infrastructure, including HS2. Hoare said negotiations with HS2 over the reset of contracts with its contractors were continuing, although he could not say when the discussions would be concluded.
“We are working with [HS2 chief executive] Mark Wild in a positive way.”
Balfour Beatty’s HS2 work includes the Old Oak Common station scheme in west London, where the first of six 450m-long passenger platforms has recently been installed. The station is one of the most significant elements of the high-speed railway’s London infrastructure and will form a major interchange between HS2 and the existing rail network.
Hoare also gave a positive assessment of new Prime Minister Andy Burnham, saying his initial impressions were “positive”. He added: “He seems to be valuing the hard hat which is good because I’ve got a lot of people who wear hard hats.”
The improved outlook has led Balfour Beatty to increase its full-year guidance. The group is now expecting profitable growth slightly ahead of its previous expectations, with the anticipated percentage increase in earnings described as being in the lower double digits. Last year, Balfour Beatty reported a pre-tax profit of £323m on revenue of £10.8bn.
Financial performance also strengthened during the first half. Average net cash increased by £400m to £1.6bn compared with the full-year position, while the group’s order book increased by £200m to £22.9bn compared with its 2025 figure. The company also increased its interim dividend by 12% to 4.7p.
The figures underline the contrasting performance of Balfour Beatty’s principal markets, with the UK power sector and US buildings providing strong growth while the contractor anticipates more subdued conditions in UK transport. The combination of grid investment in Britain and continued data centre expansion in the US is nevertheless providing significant opportunities for the group as it moves through 2026.
