Anybody trading in these shares? I just bought some @ 204.72

'Ain't that the truth'!

I took a SB on ESUR this morning @207.7 - about the only thing of mine not being thrown to the lions today!

Jefferies International lifts Balfour Beatty to 'buy' from 'underperform', target raised from 115p to 270p.

"With new management installed and the turnaround under way, we look to 2016 and 2017 profits to drive our valuation. Applying recovery multiples to our 2016 and 2017 estimates implies a price target of 270p, hence we upgrade our rating to Buy. Though construction risks remain for 2015, we take comfort in the group’s £1.3bn PPP portfolio and the incoming management’s LTIP.
A three-year turnaround. With the KPMG review now complete and a new management team on board, we believe Balfour Beatty is well set to both fix the internal problems that have plagued the business over the past 18 months and ride the wave of construction market recovery in the UK and US. Though construction risks remain in 2015, we believe investors should see Balfour as 2-3 year turnaround story and look to 2016 and 2017 profitability. We shift our valuation out to these years, increase our price target to 270p and upgrade our rating to Buy.
Getting back to basics. The KPMG review revealed significant problems in Balfour’s bid process and project management; reviewing these processes is expected to take centre stage in the group’s turnaround. We believe Balfour should refocus its attention on the infrastructure projects on which its heritage was built. In our view, larger, more complex projects have fewer bidders, higher margins, are lower risk and help to attract and retain top talent. Moving from the vicious circle of the last 18 months to a virtuous circle will be key to the turnaround.
PPP portfolio and LTIP give us comfort. We recognise the fact that Balfour is not yet out of the woods in terms of profit warnings, and there is still a chance that 2015 may contain a nasty surprise. However, the scale and strength of the group’s PPP portfolio gives us some comfort, and leaves the remaining businesses trading on 5.1x 2015 EV/EBITDA, an undemanding multiple in our view. In terms of LTIP, our base-case estimates imply the new CEO stands to pick up just 61% of his final award in 2018; some investors may wish to be more optimistic.
Valuation/Risks Given the depressed level of earnings and nature of the turnaround opportunity at Balfour Beatty, we value the shares on 2016 and 2017 estimates. We apply EV/EBITDA (10x) and PER (17x) multiples consistent with historical valuations to our 2016 and 2017 estimates, with a 10% discount in the outer year. Risks to our valuation include further UK construction writedowns and an unsuccessful implementation of management’s turnaround plan."

Full Year Results

Summary
· Total revenue1,2 of £8.8 billion, up 2% at constant exchange rates (CER); order book2 at £11.4 billion (2013: £11.8 billion), down 7% at CER.
· Total loss for the year of £59 million (2013: £35 million).
· UK construction losses include a further £118 million write-down, following an assessment of the existing risk provisions by the Board.
· International construction revenues up 24% at CER to £1.0 billion, predominantly due to Hong Kong based joint venture; Middle East construction underlying losses of £15 million.
· Investments delivers consistently strong performance, with underlying profit from operations increased to £127 million (2013: £102 million). Directors' valuation of Investments portfolio at £1,300 million (2013: £766 million).
· Strengthened balance sheet with £219 million net cash. Net assets increased to £1,230 million (2013: £1,035 million), including a £306 million reduction in the pension deficits to £128 million.
· The Board decided not to recommend a final dividend, to ensure balance sheet strength is maintained, but expects to reinstate the dividend at an appropriate level, by March 2016.
· 'Build to Last' business transformation programme has gained early momentum. Phase 1 is 24 months of self-help: to deliver £200 million cash flow improvement and £100 million cost savings versus 2014.
· Significant progress in first 12 weeks of 2015 with Board changes, senior leadership appointments, programme work streams established and consolidation of UK support functions already underway.

Take your pick!

Investec Hold 238.05 185.00 - Reiterates

Numis Add 238.05 230.00 230.00 Reiterates

Westhouse Securities Sell 238.05 - - Reiterates

Liberum Capital Buy 238.05 285.00 285.00 Reiterates

So increased trading loss, no divi, huge pension deficit, reduction in order book and loads of write-offs yet the sp goes up and the brokers increase their target??? I suppose this is all 'better than expected'?

Merrill Lynch note:
"Balfour Beatty reported FY’14 results this morning with underlying EPS loss at 8.0p vs BofAMLe at -7.2p. The group unveiled a further £118mn provision in the UK Construction division was also impacted by £15mn of losses in the Middle East. Support Services were solid and the US was in line. Management is pointing to a potential impact from the legacy problematic construction projects over the next two years and there is no earnings guidance for 2015E. Nonetheless, the additional detail on the self-help plans and cost-cutting is an important positive, in our view.

Management provided more detail on its “Built to Last” restructuring plan. It aims to achieve of £200m cash flow improvement from working capital optimization and £100m of recurrent cost savings over 24 months. We note that, if successful, the cash optimization plan would over time broadly offset the cash impact of the £188mn of UK Construction provisions reported in January and March 2015.

Balfour Beatty will distribute no final dividend for 2014E, although it intends to resume dividend payments in 2016. This follows the cancellation of the share buyback in Jan 2015. The balance sheet is nevertheless in good shape in our view as the group reported £219m of net recourse cash at Dec-14, slightly higher than the provisional £180m figure reported in the January trading update. Net pension deficit at Dec-2014 is at c.£100mn vs. the “below £200mn” communicated in January.

We have trimmed our SOTP-based PO to 260p from 265p, mainly due to lower Construction JVs and Support Services valuations, while we continue to assign no value to Construction in the UK. We cut 2015E underlying EPS by 23% due to more conservative forecasts for the UK, Middle East and Support Services, but reduce 2016E more limited 3%."

Prefs on the up again - not a bad return from a boring yielder.

AGM TRADING UPDATE

Balfour Beatty, the international infrastructure group, is holding its Annual General Meeting at 11am today.

The Group is focused on rolling out its Build to Last transformation programme. Actions are being taken to strengthen operational processes and to improve efficiency across the organisation to achieve the initial financial targets of £200 million cash in and £100 million cost out over the first 24 months. At the same time, the leadership team continues to review the Group's businesses and manage the legacy problem construction projects through to completion.

Leo Quinn, Balfour Beatty Group Chief Executive said: "We are making progress as we work to deliver the initial phase of the Build to Last transformation programme, against a backdrop of major short-term challenges. The internal focus on cash is vital to maintain a strong balance sheet through self-help. At the same time, we see continued evidence that we retain the support, trust and confidence of our customers in Balfour Beatty's expertise. I continue to believe all our operations should achieve industry-standard performance against what appears to be a beneficial market environment."

Philip Harrison, as previously announced, will be joining the Group as Chief Financial Officer. The Group today confirms that he will take up his position and join the Board on 1 June, 2015.

ENDS

UBS comment on possible approach and takeover:
"It is unclear how credible the sources are and if a bid would actually be forthcoming. We note that this is the latest in a string of potential M&A scenarios involving Balfour Beatty over the past year, following the failed merger discussions with Carillion and the JLIF bid for the investment portfolio. The premium implied by a 290p bid looks on the low side and we would expect it to be rebuffed.

We suspect the motivation for a bid would be to gain access to the UK and US markets. We suspect this is particularly the case in the UK, where the government is aiming to attract foreign investment to fund infrastructure. In general, Government-backed Chinese contractors seem to be looking to diversify abroad and have recently acquired John Holland in Australia in a carve-out for A$1.15bn in December 2014. In the case of Balfour Beatty, the £1.3bn investment portfolio could be used to part-fund a deal.

Balfour Beatty itself is in the early stages of a turnaround after a very challenging 2014, which saw heavy losses, particularly in the UK. We note that new CEO Leo Quinn's LTIP vests at a maximum 380p Jan-17/Jan-18. We think a large-premium cash bid is still unlikely at this stage."

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Done and post above removed.

StockMarketWire.com
Balfour Beatty reports encouraging progress on the group's transformation programme but warns that results will be hit by an additional shortfall of £120m-£150m.

It says the on-going, in-depth review of group businesses has continued to identify legacy issues in the UK, US and Middle East which will result in an additional shortfall to 2015 pre-tax profit of £120m-£150m. The UK accounts for approximately two-thirds of this amount.

The group says the Build to Last transformation programme is already gaining traction. New project disciplines and financial controls are being embedded, the new senior leadership team is substantially in place and good progress is being made against the £100 million permanent cost reduction programme.

And it says that as a result of the actions taken under the Build to Last programme, net cash is expected to exceed £200 million at the half year end - substantially better than H1 2014, demonstrating the Group's ability to maintain balance sheet strength through self-help.

Group chief executive Leo Quinn said: "The issues we are working through are as I set out in March and legacy challenges remain. However, we are making encouraging progress on the Group's transformation. The positive response of our people to change, the continuing confidence of our customers in Balfour Beatty's expertise and the first signs of improving cash performance reinforce my conviction in the Group's long-term success."

I still hold only the prefs - I wonder if these (and others) will benefit from the new 'roads fund' announced yesterday.

StockMarketWire.com
Balfour Beatty, in joint venture with VINCI, has been selected to deliver a smart motorway package worth up to £607.4m, the largest of Highways England's three packages within its £1.5bn Smart Motorway Programme.

Balfour Beatty VINCI, a 60:40 joint venture, will deliver smart motorway upgrades to a 10 mile stretch of the M5 Junctions 4a to 6 in Worcestershire; a 12 mile section of the M6 Junctions 2 to 4 in the Midlands, and a 32 mile stretch of the M4 Junctions 3 to 12 in London and Berkshire.

BALFOUR BEATTY JOINT VENTURE APPOINTED AS PREFERRED BIDDER


Balfour Beatty, the international infrastructure group, today announces that its joint venture with NG Bailey, the UK's largest independent services and engineering company, has been appointed as preferred bidder for the £460m Hinkley Point C power station electrical package, for EDF Energy.

The 50:50 Balfour Beatty and NG Bailey joint venture - Balfour Beatty Bailey - will work across both proposed Hinkley Point C units to deliver the critical infrastructure that will power the station and its operations, creating 1,000 jobs including many specialist engineers.

Works will include design and installation of circa 76,000 cables totalling over 3,000km in length; over 180km of cable containment support systems; fire and environmental sealing; design and installation of earthing systems, and specialist packages associated with data acquisition and plant control.

Balfour Beatty Bailey will deliver a lasting local legacy with a significant proportion of the new workforce recruited locally, 60 local apprenticeships and training commitments and partnerships with local colleges.

Leo Quinn, Balfour Beatty Group Chief Executive said:

"This project enables Balfour Beatty to deploy its extensive experience and knowledge of the nuclear sector as the UK takes its next significant step forward in low-carbon energy.

"The new nuclear programme demands a scale of resources and expertise that only the most capable and trusted partners can deliver. Equally significant, the project requires us to draw on the local community and its people in building what will be a highly specialist workforce.

"I am particularly pleased to see Balfour Beatty combining its tradition of delivering essential infrastructure with the creation of new skills and employment in this country."

Balfour Beatty Bailey's six year project is expected to commence in 2016 with design work and the construction phase in 2017. The joint venture's full contract award is scheduled for 2016, subject to the Hinkley Point C final investment decision.

Hinkley Point C, which will be located on the North Somerset coast, will be the first nuclear power station to be built in the UK for 20 years. The two new nuclear reactors that form the proposed Hinkley Point C will provide reliable, low carbon electricity to meet 7% of UK demand.

ENDS

Half Year Results

Financial Summary
· Order book1,2 stable at £11.3 billion (FY 2014: £11.4 billion).
· Underlying revenue1,2,3 stable at £4,085 million (2014: £4,072 million).
· Total underlying loss3 in the first half of £135 million (2014: profit £37 million). Total loss in the first half of £150 million (2014: £43 million).
· First half included £152 million shortfall, in line with indicated range of July trading update, reflecting historic issues in construction.
· >90% of historic UK problem contracts expected to be at practical or financial completion by end of 2016.
· Strong performance from Infrastructure Investments - Directors' valuation £1,252 million (FY 2014: £1,300 million) after realising £112 million of disposal proceeds and £37 million in distributions, with £64 million of cash invested.

Build to Last
· Build to Last already delivering: £260 million net cash as at 26 June 2015 (FY 2014: £219 million) - £362 million cash flow improvement half on half (2015: £41 million inflow; 2014: £321 million outflow)
· Actions underway to achieve £100 million of cost out by end of 2016 - annualised savings of £25 million executed in the first half.
· Favourable market trends - strong pipeline of opportunity, embedding 'Gated Business Lifecycle' approach to drive governance and control for project bidding and delivery.

Leo Quinn, Group Chief Executive commented: "Six months in, our Build to Last transformation programme is gaining traction throughout the business. We have a new senior leadership team and an organisation re-aligned with key customer sectors. We are on course to meet our 24-month targets for £200 million cash in and £100 million cost out.

"In rising core markets, the Group is continuing to win business on better terms across our operations. In the last few months the awards of contracts or preferred bidder status for three landmark projects - Bergstrom Expressway in Austin Texas, nuclear new build Hinkley Point C power station electrical package and a UK smart motorway package - is a further endorsement of Balfour Beatty's leading capabilities.
"Inevitably the headline numbers set out the consequences of the historic issues that are now being tackled. However the continuing confidence of our customers in Balfour Beatty's expertise, the positive response of our people to change, demonstrated by our excellent net cash performance, and the underlying strength of our balance sheet, supported by the Investments portfolio, all reinforce my conviction that over the medium term we can provide our customers, employees and shareholders with superior returns."

Numis Add 259.70 290.00 290.00 Reiterates

Westhouse Securities Sell 259.70 - - Reiterates

Liberum Capital Buy 259.70 285.00 285.00 Reiterates

Liberum Capital Buy 261.40 285.00 320.00 Reiterates

Jefferies International Buy 261.40 270.00 300.00 Reiterates

JP Morgan Cazenove Neutral 261.40 240.00 240.00 Retains

StockMarketWire.com
Balfour Beatty's joint venture with Morgan Sindall and BAM Nuttall has been awarded a £416m contract to construct part of London's new 'super sewer', the Thames Tideway Tunnel, for Bazalgette Tunnel.

The Thames Tideway Tunnel will ensure the capital's sewerage system is fit to support its projected population for at least the next 100 years, and will tackle the issue of discharges of untreated sewage that currently enter the River Thames on a regular basis.

Balfour Beatty's three-way equal joint venture, which is known as BMB and was appointed as preferred bidder for the scheme in February 2015, will create the six kilometre 'West' section of the 25km Thames Tideway Tunnel. BMB's 'West' section will run from Acton in West London to Wandsworth in South West London and will incorporate seven separate work sites along the route. Works will include design, construction, commissioning and maintenance for a two to five year period following construction completion.

A digital construction approach utilising Building Information Modelling (BIM) will allow full testing and simulation of construction activity before works start on site for safe and efficient delivery.

Project materials will be transported down the River Thames to ease road congestion, emissions and disruption throughout the duration of the project.