UK builder sees improvement in Dubai market

Balfour Beatty says liquidity improvement in Dubai bodes well for the future
UK builder sees improvement in Dubai market
GCC construction, Middle East construction
By Andy Sambidge
Sat 12 May 2012 01:59 PM

Balfour Beatty, Britain's largest contractor, has seen improvements in Dubai and says contract wins in the Middle East has helped the company maintain a £15bn order book.

In its 2012 Q1 interim management statement, covering the period January 1 to May 8, the company said Dubai and the US were "upsides" looking forward.

"Looking ahead, the operating environment in the construction sector remains challenging in some of our major markets. While US market recovery and liquidity improvement in Dubai bode well for upside, the UK market is expected to remain competitive," a company statement said.

"We are taking the necessary actions to manage the businesses through this period including those which will drive further structural efficiency across the Group."

It said its professional services order book at the end of March was ahead of that at the year-end with new orders in the Middle East and steady progress in the Americas.

Its construction services order book was slightly lower than at the year-end, with orders in the international businesses and in rail partly offsetting the shortfalls in the UK and the US.

The company added that it is currently bidding for a number of projects both in the UK and internationally.

It said its financial position remained strong with average net cash in the first quarter exceeding £100m.

"Looking ahead, we anticipate a reduction in Q2 before an increase in the second half," the statement added.

In March Balfour Beatty said it is shifting its work from the UAE where opportunities "are currently limited".

As it posted a 9 percent rise in full-year profit, the construction giant said it was focusing in the Middle East on markets in Qatar, Saudi Arabia and Kuwait.

It said opportunities in Dubai and Abu Dhabi were now constrained, necessitating a move away from the UAE.

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