Olivia Peters's questions to Balfour Beatty plc/ADR (BAFBF) leadership • Q2 2016
Question
Olivia Peters from Berenberg asked about the impact of Brexit on commercial tendering, requested quantification of additional costs on legacy projects, sought clarity on normalized margins for the U.S. business, and questioned the reason for a lower discount rate unwind in the PPP portfolio.
Answer
CEO Leo Quinn noted a post-Brexit downturn in commercial office tendering but stated the impact was immaterial as it's not a core focus. He confirmed aggregate overruns on the 89 legacy projects were unfavorable. He reiterated a U.S. margin target of 1-2% for buildings and 3%+ for infrastructure. CFO Phil Harrison clarified that the PPP discount rate unwind figure on the slide was a full-year number, causing confusion, and added that a third of legacy projects still required financial completion.