Sam Bland's questions to Balfour Beatty plc/ADR (BAFBF) leadership • FY 2016
Question
Sam Bland of JPMorgan Chase & Co. requested an update on the UK construction business's performance excluding the 89 problem contracts and asked if other underperforming contracts would provide a mechanical margin uplift as they roll off.
Answer
CFO Phil Harrison confirmed that the UK business performed better in H2 when excluding the 89 problem contracts. He explained that while there are other lower-margin contracts, they are not loss-making and will trade out normally. He noted that the gross margin profile on new contracts booked in 2016 has tightened considerably, indicating a better future performance as this work is executed.