Last close As at 17/08/2026
GBP9.06
▲ −10.00 (−1.09%)
Market capitalisation
GBP4,322m
Research: Industrials
Balfour Beatty (BBY) upgraded its FY26 guidance, following a strong performance in H126, driven by profitable growth in the group’s earnings-based businesses. Group revenue in H126 grew 8% y-o-y, or 10% when excluding fx movements, which management attributes to rising demand in US buildings and UK power transmission. Underlying profit from operations (PFO) increased to £119m, ahead of consensus and up 55% y-o-y, with a return to profitability for the US construction business. Management now expects PFO growth from the group’s earnings-based businesses to be in the low double-digit range, slightly ahead of prior full-year guidance. The results and increase in guidance were perceived well by the market, with the shares rising c 8% on the day of the results.
US construction, one of the group’s four strategic growth markets, delivered 19% revenue growth year-on-year and swung to a £22m PFO in H126 (H125: loss of £11m), driven by expansion in buildings and reduced civils losses. Within this market, Balfour Beatty is targeting aviation and data centre construction as high-growth sectors that align with the group’s expertise, an approach validated by $711m of combined orders during H1. Data centres comprise 6% of the US order book, although with c $1bn of further data centre work moving from award to contract, management expects this share to rise into double-digits. UK power transmission also contributed meaningfully to the group’s momentum in H126, as revenue surged 24% y-o-y.
The group completed £102m of buybacks in H126, alongside a 12% y-o-y increase in the HY DPS. Management expects to fulfil the £200m full-year buyback scheme and return c £267m to shareholders in total for 2026 (FY25: £189m). In addition to the improved outlook for PFO growth from its earnings-based businesses, management has lifted average net cash guidance by £200m to a range of £1.5–1.7bn and net finance income to £35–40m. As such, there is continued headroom for the group to sustain attractive shareholder returns into H226 and beyond.
BBY trades on FY26e P/E of 17.8x and EV/EBITDA of 8.4x, falling to 15.5x and 7.7x in FY27e, alongside consensus EBITDA growth of 3.4% and 8.8%, respectively. While this implies a premium to FY27e peers, c 25% of BBY’s market value is attributable to its Investments portfolio, which currently delivers limited to no earnings. Adjusting for this brings its P/E closer to peers.
|
Consensus estimates |
||||||
|---|---|---|---|---|---|---|
| Year end | Revenue (£m) | EBITDA (£m) | PBT (£m) | EPS (£) | DPS (£) | P/E (x) |
| 12/25 | 10,767.0 | 388.0 | 291.0 | 0.47 | 0.14 | 19.3 |
| 12/26e | 10,988.3 | 401.2 | 317.3 | 0.50 | 0.15 | 18.1 |
| 12/27e | 11,392.5 | 436.2 | 357.6 | 0.58 | 0.17 | 15.6 |
General disclaimer and copyright
This report has been prepared and issued by Edison. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.
Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.
Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.
No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.
Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.
Copyright 2026 Edison Investment Research Limited (Edison).
Australia
Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.
New Zealand
The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.
United Kingdom
This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or sol icitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.
This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.
This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.
United States
Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.
London │ New York │ Frankfurt
20 Red Lion Street
London, WC1R 4PS
United Kingdom
Research: Industrials
Vincorion supplies power and mechatronic systems for defence and aviation platforms, primarily in Germany and other NATO markets. H126 revenue rose 42.4% to €150.2m and adjusted EBIT increased 33% to €28.4m, while margin declined 1.4pp to 18.9%, reflecting a less favourable product mix, reflecting in the short term a shift between order entry and after sales. However, both are growing and after sales benefits in the long run from the growing installed base. Vehicle Systems and Power Systems drove the growth, supported by higher output and strong demand. Order entry increased to €330.2m, lifting the fixed order book to €615.3m. Management maintained adjusted EBIT margin guidance and now expects FY26 revenue at the upper end of the €280–320m range.