Construction company Balfour Beatty did not build up quite the share price gains it might have hoped for, as it revealed soaring profits.
The Channel Tunnel and London Crossrail builder said profits were up 69 per cent to £66million in the first half of the year.
Chief executive Leo Quinn demanded, when he joined the company to dig it out of a hole in 2015, that Balfour only bid for business where it thinks it can make a healthy margin.
Profit boost: But shares only climbed a modest 0.8 per cent as investors waited for more hints regarding what Balfour would do next
Though his ‘Build to Last’ approach has knocked revenues, which were down 8.6 per cent to £3.8billion, the profit figures and the collapse of Balfour’s unselective competitor Carillion earlier this year have vindicated his strategy.
Shares only climbed a modest 0.8 per cent, or 2.4p, to 292.7p as investors waited for more hints regarding what Balfour would do next.
Nicholas Hyett, an analyst at Hargreaves Lansdown, said: ‘The Build to Last strategy, which has seen the group return from the brink, calls for above average margins beyond 2019 and at the moment many divisions are still lingering at the bottom end of their target ranges.
‘In an industry where pricing is notoriously competitive, convincing buyers that Balfour is worth a premium is a tough ask.’ Cautious though shareholders were, they still received a 1.6p per share dividend – up 33 per cent from last year.
Meanwhile, investors in the FTSE 100 were also sounding the alarm bells. The UK’s blue-chip index sank 1.49 per cent, or 113.77 points, to 7497.87, as heavyweight miners dragged the index down amid a commodity commotion.
Fresnillo, Anglo American and Antofagasta were the biggest fallers, down 7.8 per cent, 6.2 per cent and 5.7 per cent respectively, as the dollar climbed to its highest levels in over a year and metals prices took a dive.
The Turkish lira crisis has pushed up demand for the US currency as a safe haven, which in turn has squeezed metals prices. Materials such as copper trade by reference to the dollar, so become more expensive and less attractive in local currencies when the dollar rises.
Oil giants Royal Dutch Shell and BP also caused the FTSE 100 to slide, with both almost 2 per cent lower at the end of the day.
Stocks of US crude unexpectedly rose amid concerns that disputes would escalate between the US and its major trading partners, pushing prices down.
Car insurer Admiral was one of the six companies holding the blue-chip index up, as its half-year profits motored higher.
Pre-tax profit rose 9 per cent to £211million, causing chief executive David Stevens to rave in both French and Italian that ‘our European operations are profitable’. The core UK car insurance business also continued to expand, and in early 2018 Admiral passed the four million mark for cars on cover.
Drugs giant GlaxoSmithKline helped to balance out losses in the FTSE 100
Shareholders seemed chuffed with the results, as Admiral climbed 3.2 per cent, or 64p, to 2062p. But employees were also celebrating, as 10,000 staff each received shares worth £1,800 under the employee share scheme.
Drugs giant GlaxoSmithKline helped to balance out losses in the FTSE 100, as it revealed positive results from the phase three trial of its new HIV treatment.
The study found that patients who were suppressing HIV with three medications every day, experienced similar results with GSK’s monthly injections. Shares climbed 2 per cent, or 30.4p, to 1590.4p.
Hikma Pharmaceuticals, a FTSE 250-listed company which creates unbranded or generic drugs, ended the day up 6 per cent, or 98p, at 1745p. Its half-year operating profit climbed 54 per cent to £137million, and analysts at Cantor Fitzgerald said that the company benefited from a ‘favourable product mix’.