Market report: Balfour Beatty fails to build confidence with investors
Numerous companies have pledged there is light at the end of the tunnel, things will get better, and there are encouraging signs despite the virus crisis wreaking havoc. Today Balfour Beatty joined that list, but positivity fell on deaf ears.
Leo Quinn, the boss of the FTSE 250 contractor, said: “The financial impacts of Covid-19 are unavoidable, but they will pass.” He pointed to a good order book and upcoming contracts.
But investors focused on how much Covid has hurt business so far, and the shares lost 8.38p, or 3.2%, to 253.42p.
The HS2 contractor recorded a pre-tax loss of £26 million for the six months to June 26, compared with a £63 million profit a year earlier.
Balfour Beatty was hit after closing some construction sites in Scotland and London for the Covid-19 lockdown, and added that some projects in the aviation sector have been put on hold.
Over to the FTSE 100, and Spirax-Sarco Engineering was among the biggest fallers. Nicholas Anderson, chief executive of the thermal energy management and niche pumping specialist, warned organic revenue growth in the second half will be lower than anticipated in May.
Anderson said: “As hopes of a V-shaped recovery recede, we now anticipate a lower rate of economic activity in the fourth quarter.”
The shares decreased 215p to 10445p.
Avast was also out of favour, down 39p to 561p. The cybersecurity firm saw an upswing in demand for products as people started working from home during the lockdown. But the firm, which also reported lower operating profit, said that as people and businesses emerge from lockdown, things are returning to pre-Covid levels.
It said: “Our current assessment is that the pronounced uplift experienced in the first half was temporary.”
Overall the FTSE 100 improved 46.04 points to 6200.38 and the FTSE 250 lost 24.99 points to 17972.19.
Elsewhere, shares in Hostelworld slipped 1.27% to 62.1p. Revenues fell 69% in the first half, driven by Covid-19 led travel restrictions.
Read more
Balfour Beatty in line for order book growth thanks to HS2 approval
