Balfour Beatty share price slips despite £300m project award

Balfour Beatty (LON:BBY) shares were again in the red this morning, losing 0.9 percent to 241.90p by 10:44 GMT, despite the announcement that the company had won a major role in the £300 million 10-year Thames Estuary Asset Management Programme.

The company’s statement portrayed the project as “the largest single flood risk asset management programme ever awarded in the UK”. The programme will cover a number of measures, including creating, replacing and maintaining tidal walls, flood barriers, pumping stations and more.

The project covers 170km of the Thames estuary and directly protects 1.25 million people and £200 billion in property. Balfour Beatty is expecting to collect up to £250 million from the programme.

“We look forward to being part of an integrated team that will deliver this vital programme along the Thames Estuary,” Leo Quinn, Balfour Beatty’s Group chief executive, said.

“Balfour Beatty is bringing significant expertise in flood defence to protect one of the world’s greatest cities from the sea.”

The company’s statement added that the individual, £10 million-projects are expected to be awarded by the third quarter of this year.

The announcement follows another big project Balfour Beatty was selected to take part in – the construction of the Thames Tideway Tunnel, the so-called “Super Sewer”. Balfour Beatty, alongside BAM Nuttall and Morgan Sindall, was awarded a job on the Western section, worth about £300-£500 million.

Investors are now eyeing the upcoming annual report from the London-based construction giant. A review conducted by KPMG in January advised the company to reduce construction profits by £70 million and cancel a £200 million share buyback programme. The report said the year-end order book is expected to stand at £11.7 billion, slightly below the third quarter and 12.7 percent lower than the £13.4 billion of 2013.

As of 11:24 GMT, Monday, 09 March, Balfour Beatty plc share price is 240.75p.