Balfour Beatty’s Trading Statement
We enjoyed Balfour Beatty’s trading statement on Wednesday. The City enjoyed it even more and marked the shares up nearly 30p (+7%) in the day.
Good news is always welcome but, on its own, not enough: people want to know, why? Why such a jump? What does the City know? Here are some of the theories we’ve heard:
- Balfour Beatty is just a great company - we’ve highlighted this before - and the day’s jump was just part of a re-rating of the stock that started five years ago;
- The Centex deal looked inspired at the time, but the sub-prime woes have made eveyone jumpy since. The trading update put these fears to rest;
- Anthony Rabin, BB’s FD, is a cautious fellow and Balfour Beatty has built a well-deserved reputation for clean and conservative accounting. If he’s saying things are good, they must be.
- If you’ve recently had the misfortune to sit on the M1 by Luton, stuck in the jam caused by the road-widening, you’ll have noticed lots of Balfour Beatty plant. This motorist’s heart sinks at the prospect of more pain on the M25, but the chatter is that Britain’s best civil engineer might get to repeat the trick on Britain’s biggest road project soon.
