Balfour Beatty Share Price Climbs on Regional Restructuring and Contract Win

The Balfour Beatty share price rose more than four percent in early morning trading in London on Monday, June 10. As of 10:23 the infrastructure group’s stock was trading at 224.80p, boosted by news which, according to analysts, could cast light on the company’s growth prospects.

New Boss Takes Reins at UK Construction Division

In an update on progress made in its UK construction business, Balfour Beatty (LON:BBY) said in a press release on Monday that it was proposing to close three regional offices after appointing a new head of the struggling division.

The three units to be closed are in Dartford, southeast of London, Rochdale in northwest England and Doncaster in the north. Collectively they account for around eight percent of Balfour Beatty’s UK regional business, which generated £1.5 billion in revenue in 2012, of the group’s total of £9.5 billion. The FTSE 100-listed company also said that it was addressing specific operational issues across a handful of projects in southwest England, without elaborating.

Nick Pollard, who has worked as an adviser to the British government and has held senior roles at Network Rail, will run Balfour Beatty’s UK construction division from June 17, according to the group’s press release. His appointment is one element of the company’s plan to boost the profitability of its struggling UK construction business.

Providence Tower

In a separate press release Balfour Beatty announced on Monday that it had been awarded a contract in excess of £110 million to build the 43-storey Providence Tower residential skyscraper in London Docklands for Landor, a wholly-owned subsidiary of The Ballymore Group.

The deal means that Balfour Beatty has finally cracked the London skyscraper market, which it has been targeting for several years. Once complete, the structure will be the tallest building constructed by Balfour Beatty in the UK. The project is slated to deliver 484 residential units located at New Providence Wharf, by the river Thames.

The group said that the main construction works were due to commence this summer with completion planned for December 2015. Around 340 luxury flats will be located within the main London tower with the remainder built in a 12-storey curved podium adjoining the skyscraper together with affordable apartments.