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05 December 2023

State-funded contracts to boost Balfour, Interserve

Balfour Beatty and Interserve are raising their presence in the region. (REUTERS)

By Staff Writer

Construction and services group Balfour Beatty said yesterday trading in the second half of 2008 was strong, as it eyes further growth in 2009 in spite of a global economic downturn.

Balfour Beatty and Interserve said state-funded contracts and growth in the Middle East will prop up their construction arms.

Interserve won a contract valued at £65 million (Dh350m) to build an office block in Qatar, it said yesterday. Balfour's Dubai business performed well and anticipated reaching financial close on its four so-called private finance initiatives during the year. Both have sought to shield themselves from a slowing UK market.

"In the Middle East, there are exciting opportunities in Abu Dhabi, where our presence is growing," Interserve said. Prospects for the region remain highly attractive given the company's position in growth economies such as Qatar, Oman and Bahrain.

Balfour Beatty, whose businesses include engineering, construction, road and rail transport, said its year-end order book is robust and is upbeat regarding the outlook.

Balfour said its confirmed order book has increased from the £12.1bn reported on August 13, 2008, with net cash of about £250m. Interserve, the company that maintains the British Army's training grounds, said it has already secured 66 per cent of its expected 2009 sales.

"Despite the difficult economic environment, we anticipate making progress in 2009," said the company.

Balfour said it benefited from strong growth in infrastructure expenditure, particularly in education and healthcare, with average net cash for the second half of the year ending December 31 of about £250m.