Half Year 2026 Balfour Beatty PLC Earnings Call

August 12, 2026

[Company Representative 1] (Balfour Beatty): Hinkley Point C is one of the most complex projects in the world.

Speaker #1: Pink plc is one of the most complex projects in the world.

Speaker #2: The thing you see most as you walk up is just a sea of cranes. It's like a mini-city in itself.

[Company Representative 2] (Balfour Beatty): The thing you see most as you walk up is just a sea of cranes.

Philip Hoare: It is like a mini city in itself.

Speaker #1: And then there's so much underground as well that you can't see.

[Company Representative 1] (Balfour Beatty): There is so much underground as well that you cannot see.

Speaker #3: There are so many different activities that you can place at the same time.

Philip Hoare: Many different activities taking place at the same time.

Speaker #2: Standing out on the shoreline and looking out into the Bristol Channel, that's when I really realized the scale of what Balfour Beatty was doing on this project.

[Company Representative 3] (Balfour Beatty): Standing out on the shoreline and looking out into the Bristol Channel, that is when I really realized the scale of what Balfour Beatty were doing on this project. Being the first nuclear power station being built in a generation comes with its own complexities. Nuclear power stations rely on cooling waters to keep them safe.

Speaker #2: It's been the first nuclear power station built in a generation. It comes with its own complexities. Nuclear power stations rely on cooling water to keep them safe.

Speaker #4: We're creating the tunnels which will pull the water out from the estuary into the reactor to cool the reactor.

[Company Representative 2] (Balfour Beatty): We are creating the tunnels which will pull the water out from the estuary into the reactor to cool the reactor. We have actually mined 10 kilometers of tunnels out beneath the Bristol Channel. Sometimes you have to remind yourself that there is a body of water above you.

Speaker #2: We've actually mined 10 kilometers of tunnels out beneath the Bristol Channel. Sometimes, you have to remind yourself that there is a body of water above you.

Speaker #1: It's really tight tolerances—of course, it has to be.

[Company Representative 1] (Balfour Beatty): It is really tight tolerances. Of course, it has to be.

Speaker #4: We have all these different teams working together. We've brought people from all over the world to here.

[Company Representative 3] (Balfour Beatty): We have all these different teams working together. We have brought people from all over the world to here.

Speaker #2: We've got geologists, surveyors, safety, and commercial.

[Company Representative 2] (Balfour Beatty): We have got geologists, surveyors, safety, commercial.

Speaker #1: Engineering, design.

Philip Hoare: Engineering, design.

Speaker #4: And we all come together and work cohesively as a team.

[Company Representative 3] (Balfour Beatty): And we all come together and work cohesively as a team.

Speaker #2: This project just goes to show the capacity of Balfour Beatty to deliver huge infrastructure projects like this—successfully and safely, which is important.

[Company Representative 2] (Balfour Beatty): This project just goes to show the capacity of Balfour Beatty to deliver huge infrastructure projects like this successfully and safely, which is important.

Speaker #1: So, that capability that we've got is now going to go on to feed other projects that I think are going to learn a lot from what we've done here.

[Company Representative 1] (Balfour Beatty): That capability that we have got is now going to go on to feed other projects that I think are going to learn a lot from what we have done here.

Speaker #4: Good morning, everyone. I'm Philip Hall, Group Chief Executive of Balfour Beatty, and it gives me great pleasure to welcome you to our half-year results announcement for 2026.

Philip Hoare: Good morning, everyone. I am Philip Hoare, Group Chief Executive of Balfour Beatty, and it gives me great pleasure to welcome you to our H1 results announcement for 2026. I am joined today by Myles Westcott, our new CFO, who has been with us just a few months, but is already having an incredible impact on our business. I know we will all look forward to hearing from Myles a little bit later as he gives us the detail of the results announcement. But before we start, what a fantastic video. I just love watching images like that of Balfour Beatty, because it really typifies the fantastic people that we have within our organization, the depth and breadth of quality that we possess.

Speaker #4: I'm joined today by Miles Westgott, our new CFO, who's been with us just a few months but is already having an incredible impact on our business.

Speaker #4: And I know we'll all look forward to hearing from Miles a little bit later as he gives us the detail of the results announcement.

Speaker #4: But before we start, what a fantastic video! I just love watching images like that of Balfour Beatty, because it really typifies the fantastic people that we have within our organization—the depth and breadth of quality that we possess.

Speaker #4: It goes to the complex projects that we're delivering around the world. And, of course, it goes to the pride that we have in terms of delivering for our customers.

Philip Hoare: It goes to the complex projects that we are delivering around the world, and of course, it goes to the pride that we have in terms of delivering for our customers. I wanted to start with a huge thank you to all of our Balfour Beatty colleagues. For those of you that are listening now or in the future, thank you so much for your hard work and your commitment, because it is down to you that I am able to stand here today and talk about our company and the future. Thank you. Now let us get into the H1 results. Look, I am really pleased with our H1 performance. We have delivered profitable growth and strong cash performance across the business.

Speaker #4: So, I wanted to start with a huge thank you to all of our Balfour Beatty colleagues. For those of you listening now or in the future, thank you so much for your hard work and your commitment, because it's down to you that I'm able to stand here today and talk about our company and the future.

Speaker #4: So, thank you. Now, let's get into the first half-year results. And look, I am really pleased with our first-half performance. We've delivered profitable growth and strong cash performance across the business.

Speaker #4: And, as I talked about last March, we anticipated the conclusion of the U.S. monitorship, and that happened as planned on the 6th of June.

Philip Hoare: As I talked about last March, we anticipated the conclusion of the US monitorship, and that happened as planned on 6 June. So, a really important milestone for our company that allows us now to really get on and focus on delivery for the service men and women of the US. What that means overall, when you look at it from a margin perspective, is that our profit from operations in our earnings-based businesses increased to 2.9%, up from 2.2% in the previous H1. So when you carry forward that strong H1 performance and look to our outlook for the full year 2026, we've slightly upgraded our guidance, on PFO, which you'll have seen within our numbers.

Speaker #4: So, a really important milestone for our company that allows us now to really get on and focus on delivery for the servicemen and women of the US.

Speaker #4: What that means overall, when you look at it from a margin perspective, is that our profit from operations in our earnings-based businesses increased to 2.9%, up from 2.2% in the previous half-year.

Speaker #4: So, when you carry forward that strong first-half performance and look to our outlook for the full year 2026, we've slightly upgraded our guidance on PFO, which you'll have seen within our numbers.

Speaker #4: Now, of course, our £200 million share buyback that I announced in March is well on track. And so overall, we look to return £267 million to our shareholders over the course of this year.

Philip Hoare: Now, of course, our GBP 200 million share buyback that I announced in March is well on track, and so overall, we look to return GBP 267 million to our shareholders over the course of this year. Now, turning to the future and thinking about momentum in the organization. Our order book remains substantial at GBP 23 billion, and I'll talk some more about the details of that in a moment. But this gives us really strong visibility into the future and confidence about where we're heading as a business. Then finally, we're well positioned in the growth markets that we've selected, and again, I'll give you some more color on that. So I'm really pleased with H1 performance. It's been strong. It's allowed us to slightly upgrade our guidance for the full year, and of course, I'm really positive about the momentum that we carry into the future.

Speaker #4: Now, turning to the future and thinking about momentum in the organization, our order book remains substantial at £23 billion. I'll talk some more about the details of that in a moment.

Speaker #4: But this gives us really strong visibility into the future and confidence about where we're heading as a business. And then finally, we're well positioned in the growth markets that we've selected—and again, I'll give you some more color on that.

Speaker #4: So, I'm really pleased with the first half performance. It's been strong. It's allowed us to slightly upgrade our guidance for the full year, and, of course, I'm really positive about the momentum that we carry into the future.

Speaker #4: So let me talk about those markets for a moment. Now, of course, we operate across a number of geographies and different market areas. But we've specifically selected these markets for the future growth of our business because either we can see significant scale-up opportunity, or they're large, resilient markets like UK transport.

Philip Hoare: Let me talk about those markets for a moment. Now, of course, we operate across a number of geographies and different market areas, but we've specifically selected these markets for the future growth of our business because either we can see significant scale-up opportunity or they're large, resilient markets like UK transport. But we're focused around UK energy, both on power transmission and on energy generation, in UK defense, UK transport, and in US buildings. We've seen some really good, positive momentum in those markets in the H1 of the year. So I just wanted to share some of the highlights of that with you. Firstly, within UK power transmission, momentum continues to build.

Speaker #4: But we're focused around UK energy, both on power transmission and on energy generation; in UK defense, UK transport, and in US buildings. And we've seen some really good, positive momentum in those markets in the first half of the year.

Speaker #4: So, I just wanted to share some of the highlights of that with you. Firstly, within UK power transmission, momentum continues to build. We've shared this graph with you on the right-hand or left-hand side of the screen before.

Philip Hoare: We've shared this graph with you on the right-hand or left-hand side of the screen before, and it's one I really like because, not only does it show where that growth is going to happen between now and 2030, but it also indicates that we have 25% market share. What we see is, and what we aspire to do, is to maintain that market share as that market continues to grow. The H1 has been really positive from that perspective. So 24% growth in revenue year-on-year. Our order book now stands at GBP 2.1 billion. That's up from GBP 1.6 billion at the end of last year. That pipeline of opportunities where work has been awarded, but we're not yet in the construction phase, remains at GBP 6 billion to GBP 8 billion.

Speaker #4: And it's one I really like, because not only does it show where that growth is going to happen between now and 2030, but it also indicates that we have a 25% market share.

Speaker #4: And what we see is, and what we aspire to do, is to maintain that market share as that market continues to grow. The first half has been really positive from that perspective.

Speaker #4: So, 24% growth in revenue year on year—our order book now stands at £2.1 billion, up from £1.6 billion at the end of last year.

Speaker #4: And that pipeline of opportunities, where work has been awarded but we're not yet in the construction phase, remains at £6 to £8 billion.

Speaker #4: So, if you remember before, I've described part A and part B of that work, where part A is all about design development and getting to the right cost profile for those works.

Philip Hoare: So if you remember before, I have described the part A and the part B of that works, where part A is all about design development and getting to the right cost profile for those works, part B is when it goes into construction and enters our order book. When I talk about momentum, we have seen that now begin to move. In H1, we were awarded Netherton Hub with SSE. That is a GBP 325 million scheme, which was in part A and has now transitioned into part B. We have also been awarded a new substation on top of the work we are already doing at Bramford to Twinstead for National Grid. We are doing the overhead lines.

Speaker #4: Part B is when it goes into construction and enters our order book. And so, when I talk about momentum, we've seen that now begin to move.

Speaker #4: So in the first half of the year, we were awarded Netherton Hub with SSE, so that's a £325 million scheme, which was in part A and has now transitioned into part B.

Speaker #4: We've also been awarded a new substation on top of the work we're already doing at Bramford to Twinstead for National Grid. So, we're doing the overhead lines.

Speaker #4: We've now been awarded the substation work that goes alongside that, and we've secured further routes to market through a new framework with National Grid that will take us into the future.

Philip Hoare: We have now been awarded the substation work that goes alongside that, and we have secured further routes to market, through a new framework with National Grid that will take us into the future. Look, I think really positive momentum underpinned by the further wins that we have had in this growth market. Turning now to UK defense, that we are really well differentiated in this space, and I will outline some of that in a moment. The key thing that has happened in H1 is the publication of something called the Defence Investment Plan. The Defence Investment Plan does a few things. Firstly, it sets out with greater certainty the level of investment in UK defense infrastructure over the course of the period from now to 2030. You can see the percentages increase in spending there that happens.

Speaker #4: So, look, I think there's really positive momentum underpinned by the further wins that we've had in this growth market. Turning now to UK defense, we are really well differentiated in this space.

Speaker #4: And I'll outline some of that in a moment. But the key thing that's happened in the first half of this year is the publication of something called the Defense Investment Plan.

Speaker #4: And the Defense Investment Plan does a few things. Firstly, it sets out with greater certainty the level of investment in UK defense infrastructure over the course of the period from now to 2030.

Speaker #4: So, you can see the percentages increase in spending there that happens. And really, what that does is drive this greater certainty for us in terms of the opportunities that are there in the market.

Philip Hoare: Really what that does is drives greater certainty for us in terms of the opportunities that are there in the market. It went beyond that and also then set some guidance around what it looks like through to 2035 and an increase in UK defense spending to 3.5% of GDP. Again, this is positive from our perspective because it gives a longer-term view of an already important investment market. Additionally, on top of that, I think it pointed to a number of things. The first one of those is that having defense as a UK growth engine, so using that investment to create new jobs, to think about not just defense as a national security point, but also as something that is going to drive economic growth across the UK.

Speaker #4: But it went beyond that and also then set some guidance around what it looks like through to 2035, and an increase in UK defense spending to 3.5% of GDP.

Speaker #4: So again, this is positive from our perspective because it gives a longer-term view of an already important investment market. Additionally, on top of that, I think it pointed to a number of things.

Speaker #4: So the first one of those is having defense as a UK growth engine. So, using that investment to create new jobs, to think about not just defense as a national security point, but also as something that's going to drive economic growth across the UK.

Speaker #4: UK capability is being prioritized. And again, this is good news for Balfour Beatty because, as a UK-domiciled business, I think that allows us to really think about the Team GB approach to delivering defense in the UK and, clearly, we'll be working closely with our clients in this space to really build out those deep and trusted relationships.

Philip Hoare: UK capability is being prioritized, and again, this is good news for Balfour Beatty because as a UK-domiciled business, I think that allows us to really think about the Team GB approach to delivering defense in the UK. Clearly, we will be working closely with our clients in this space to really build out those deep and trusted relationships. Finally, speed of delivery is important, isn't it? It is about being able to build on the program as it stands and deliver that into the future. Procurement reform that supports that, I think is incredibly important. Alongside that, I think we are incredibly well-differentiated in this market. Our strong track record, our extensive capability that we have, our ability to transfer skills from the complex nuclear environment into defense, I think sets us apart.

Speaker #4: And then, finally, speed of delivery is important, isn't it? It's about being able to build on the program as it stands and deliver that into the future.

Speaker #4: And so procurement reform that supports that, I think, is incredibly important. Now, alongside that, I think we are incredibly well differentiated in this market.

Speaker #4: Our strong track record, our extensive capability that we have, and our ability to transfer skills from the complex nuclear environment into defense, I think, sets us apart.

Speaker #4: And then, when you take into account the recent investments that we've made, both in security-cleared staff and in a ring-fenced IT system that allows us to operate in that defense space, I think we're incredibly well positioned.

Philip Hoare: And then when you take into account the recent investments that we have made, both in security-cleared staff and in a ring-fenced IT system that allows us to operate in that defense space, I think we are incredibly well-positioned. Then finally, having a robust balance sheet, a strong relationship with UK government, and the fact that we are a UK-domiciled company, I think puts us in a great position to really capitalize on the growth that we see in the defense space. So larger market, improved policy environment that should speed up delivery, and momentum building across the programs of work in the defense space. Turning now to the US, I just wanted to touch on a few factors, and I might cast your minds back to March when we talked about some new growth areas that we saw within the US overall.

Speaker #4: And then finally, having a robust balance sheet, a strong relationship with the UK government, and the fact that we're a UK-domiciled company, I think puts us in a great position to really capitalize on the growth that we see in the defense space.

Speaker #4: So, larger market, improved policy environment that should speed up delivery, and momentum building across the programs of work in the defense space. Turning now to the US, I just wanted to touch on a few factors, and I might cast your minds back to March when we talked about some new growth areas that we saw within the US overall.

Speaker #4: But look, it's been a great start to the year for US Construction. Our revenue is up 19% in the half-year 2025. And we've really begun to do something that I think is critically important in that market, which is leveraging the great capability we have in one area or with one customer and taking that and spreading it across the US.

Philip Hoare: But look, it has been a great start to the year for US construction. Our revenue is up 19% on the H1 2025. And we have really begun to do something that I think is critically important in that market, which is about leveraging the great capability we have in one area or with one customer, and taking that and spreading it across the US. So as an example, we have been targeting Wells Fargo, the banking group in the US where we have had a 20-year relationship working with them. And we are now on a national framework with Wells Fargo, which has meant that we have now started delivering work for them in each of the geographic areas that we operate in. So really simple, a customer we know well, doing work across the US, we are now working with them across the US.

Speaker #4: So, as an example, we've been targeting Wells Fargo, the banking group in the US, where we've had a 20-year relationship working with them. We're now on a national framework with Wells Fargo, which has meant that we've started delivering work for them in each of the geographic areas that we operate in.

Speaker #4: So, really simple—a customer we know well, doing work across the U.S.; we're now working with them across the U.S. In particular, I wanted to highlight the aviation and data center market.

Philip Hoare: In particular, I wanted to highlight the aviation and data center market. So I spoke to you last time about those being important market verticals for us. Important because we have got great capability, but also because we see significant growth in the medium to long term. So the aviation market, $140 billion worth of construction between now and 2029. We have a great track record delivering across seven airports in the US. And in the H1 of the year, we won another significant mandate with Raleigh-Durham Airport for $361 million. And so we are now focused on that as a vertical within the US market. Data centers, I mean, you cannot pick up anything these days and not read about data centers and what is happening. Data centers are not new for us. We have been working with key clients for over 20 years delivering data centers.

Speaker #4: So, I spoke to you last time about those being important market verticals for us—important because we've got great capability, but also because we see significant growth in the medium to long term.

Speaker #4: So, the aviation market: $140 billion worth of construction between now and 2029. We have a great track record delivering across seven airports in the US.

Speaker #4: And in the first half of the year, we won another significant mandate with Raleigh-Durham Airport for $361 million. And so, we're now focused on that as a vertical within the US market.

Philip Hoare: And so we are now focused on that as a vertical within the US market. Data centers, I mean, you cannot pick up anything these days and not read about data centers and what is happening. Data centers are not new for us. We have been working with key clients for over 20 years delivering data centers. But actually, we are putting increasing focus on, again, taking a relationship and a customer that we know well and working with them across the breadth of the US. So we made great progress in the H1 of the year.

Speaker #4: Data centers—I mean, you can't pick up anything these days and not read about data centers and what's happening. Data centers are not new for us.

Speaker #4: We've been working with key clients for over 20 years, delivering data centers. But actually, we're putting increasing focus on, again, taking a relationship and a customer that we know well and working with them across the breadth of the U.S.

Philip Hoare: But actually, we are putting increasing focus on, again, taking a relationship and a customer that we know well and working with them across the breadth of the US. So we made great progress in the H1 of the year. A $350 million set of wins, taking and expanding our capability beyond the Northwest into Virginia, and we have secured a further $1 billion worth of work that has been awarded but not yet contracted that we are in the process of moving through into our order book. So I see significant momentum occurring in that market overall. So what I wanted to do there was just give you a snapshot of some of the great momentum that we are seeing in the organization in the H1 of the year. But what I am going to do now is hand over to Myles and let him take you through the details of the financials.

Speaker #4: So, we made great progress in the first half of the year—a $350 million set of wins, taking and expanding our capability beyond the Northwest into Virginia.

Philip Hoare: A $350 million set of wins, taking and expanding our capability beyond the Northwest into Virginia, and we have secured a further $1 billion worth of work that has been awarded but not yet contracted that we are in the process of moving through into our order book. So I see significant momentum occurring in that market overall. So what I wanted to do there was just give you a snapshot of some of the great momentum that we are seeing in the organization in the H1 of the year. But what I am going to do now is hand over to Myles and let him take you through the details of the financials.

Speaker #4: And we've secured a further $1 billion worth of work that's been awarded but not yet contracted, which we're in the process of moving through into our order book.

Speaker #4: So, I see significant momentum occurring in that market overall. So, what I wanted to do was just give you a snapshot of some of the great momentum that we're seeing in the organization in the first half of the year.

Speaker #4: But what I'm going to do now is hand over to Miles and let him take you through the details of the financials.

Speaker #3: Thanks very much, Philip. Good morning, everyone. I'm delighted to be here. It's such an exciting time for Balfour Beatty. Since joining in May, I've spent much of my time getting to know the business and meeting colleagues from across the Group.

Myles Westcott: Thanks very much, Philip. Good morning, everyone. I am delighted to be here at such an exciting time for Balfour Beatty. Since joining in May, I have spent much of my time getting to know the business, meeting colleagues from across the group. Even in the short time I have been in role, it has been clear to see the depth of expertise we have, delivering such an impressive portfolio of complex projects together with an embedded culture of disciplined governance and risk management. Whilst I will of course bring a fresh perspective, I have joined a business with strong foundations and real momentum. I am very much looking forward to getting to know Balfour Beatty even more in the coming months and working closely with Philip and the wider team to deliver our next chapter of profitable growth.

Speaker #3: Even in the short time I've been enrolled, it's been clear to see the depth of expertise we have, delivering such an impressive portfolio of complex projects, together with an embedded culture of disciplined governance and risk management.

Speaker #3: Whilst I will, of course, bring a fresh perspective, I've joined the business with strong foundations and real momentum. I'm very much looking forward to getting to know Balfour Beatty even more in the coming months, and working closely with Philip and the wider team to deliver our next chapter of profitable growth.

Speaker #3: Which leads me nicely on to the financials and the strong first-half results, which I'll now take you through. So, headline numbers: revenue grew by 8% to £5.6 billion, which was a 10% increase if you exclude foreign exchange movements.

Myles Westcott: Which leads me nicely onto the financials and the strong H1 results, which I will now take you through. Headline numbers. Revenue grew by 8% to GBP 5.6 billion, which was 10% increase if you exclude foreign exchange movements. This was largely due to increased volumes in US Buildings and UK Power Transmission. Profit from the earnings-based businesses increased by 42% to GBP 153 million as Support Services grew strongly, driven by Power, and US Construction returned a profit compared to the loss we reported a year ago. Group profit for the period increased by 44%, which when combined with the effect of the ongoing share buyback program, resulted in earnings per share increasing by 51% to 21.7 pence per share. As usual, our interim dividend is one-third of last year's full dividend, which equates to 4.7 pence, a 12% increase.

Speaker #3: This was largely due to increased volumes in US buildings and UK power transmission. Profit from the earnings-based businesses increased by 42% to £153 million.

Speaker #3: The support services grew strongly, driven by Power, and US Construction returned a profit compared to the loss we reported a year ago. Group profit for the period increased by 44%, which, when combined with the effect of the ongoing share buyback program, resulted in earnings per share increasing by 51% to 21.7 pence per share.

Speaker #3: As usual, our interim dividend is one third of last year's full dividend, which equates to 4.7 pence—a 12% increase. The order book increased slightly in the period to £22.9 billion, and the Directors' valuation of the infrastructure portfolio remained around £1.1 billion.

Myles Westcott: The order book increased slightly in the period to GBP 22.9 billion and the director's valuation of the infrastructure portfolio remained around GBP 1.1 billion. Cash performance was once again very strong and included significant working capital increases in the US and in Power. As a result, net cash stands at GBP 1.7 billion and average net cash for the period was GBP 1.6 billion. Overall, positive H1. I will take you through each of the elements in a bit more detail now. Starting with Construction Services, which is much improved compared to the H1 of last year. Operational performance in UK Construction was strong in the H1, delivering PFO margin of 3.4%. This represents improvement of 50 basis points after you exclude the one-off insurance recovery booked in the H1 of last year.

Speaker #3: Cash performance was once again very strong, and included significant working capital increases in the US and in Power. As a result, net cash stands at £1.7 billion, and average net cash for the period was £1.6 billion.

Speaker #3: So, overall, a positive first half, and I'll take you through each of the elements in a bit more detail now. Starting with Construction Services, which is much improved compared to the first half of last year.

Speaker #3: Operational performance in UK Construction was strong in the first half, delivering a PFO margin of 3.4%. This represents an improvement of 50 basis points, after you exclude the one-off insurance recovery booked in the first half of last year.

Speaker #3: In the US, Buildings continued to deliver profitable growth, driving a 19% increase in US Construction revenues. And in Civils, the business delivered a much reduced loss, with the Texas highway project—which has been a drag on profitability—expected to achieve final closeout shortly.

Myles Westcott: In the US, Buildings continued to deliver profitable growth, driving a 19% increase in US Construction revenues. In Civils, the business delivered a much-reduced loss with the Texas highway project, which has been a drag on profitability, expected to achieve final closeout shortly. As a result, US Construction delivered GBP 22 million of PFO compared to a H1 loss in the prior year. At Gammon, revenue dropped by 6% on a constant currency basis due to the reduced activity at Hong Kong International Airport, where Terminal 2 has recently opened. Margin percentage was lower than prior year, which is largely due to timing as we progress commercial closeouts on a small number of projects. Moving to Support Services, which has once again shown healthy revenue growth and achieved strong margins. Power Transmission volumes have continued to grow, driving 10% increase in Support Services revenue in the period.

Speaker #3: As a result, US Construction delivered £22 million of PFO, compared to a first-half loss in the prior year. At Gammon, revenue dropped by 6% on a constant currency basis due to reduced activity at Hong Kong International Airport, where Terminal 2 has recently opened.

Speaker #3: Margin percentage was lower than the prior year, which is largely due to timing, as we progressed commercial closeouts on a small number of projects. Okay.

Myles Westcott: Margin percentage was lower than prior year, which is largely due to timing as we progress commercial closeouts on a small number of projects. Moving to Support Services, which has once again shown healthy revenue growth and achieved strong margins. Power Transmission volumes have continued to grow, driving 10% increase in Support Services revenue in the period.

Speaker #3: Moving to Support Services, which has once again shown healthy revenue growth and achieved strong margins. Power transmission volumes have continued to grow, driving a 10% increase in Support Services revenue in the period.

Speaker #3: And moving to PFO, the division has delivered a very strong first-half performance, growing profit to £66 million, with a 9.1% margin. This includes margin improvement across both Power and Transportation, and also a change in mix with Power now contributing a higher proportion of the division's volumes.

Myles Westcott: Moving to PFO, the division has delivered a very strong H1 performance, growing profit to GBP 66 million with a 9.1% margin. This includes margin improvement across both power and transportation, and also a change in mix with power now contributing a higher proportion of the division's volumes. It is also worth noting we are seeing less seasonality in support services than in recent years, which is likely to lead to a more even split between the H1 and H2 profit this year. To the order book, which we have maintained at around GBP 23 billion. This gives us really strong visibility over the next few years, allows us to plan ahead and invest confidently. As Philip mentioned, we have secured the Netherton Hub contract with SSE, which will be delivered by the UK construction division.

Speaker #3: It's also worth noting we're seeing less seasonality in support services than in recent years, which is likely to lead to a more even split between first and second half profit this year.

Speaker #3: Okay, to the order book, which we've maintained at around £23 billion. This gives us really strong visibility over the next few years, and allows us to plan ahead and invest confidently.

Speaker #3: As Philip mentioned, we've secured the Netherton Hub contract with SSE, which will be delivered by the UK Construction division. The ability to provide earthworks and civil infrastructure capabilities is a great example of the group's differentiated end-to-end offering, which sets us apart in the sector.

Myles Westcott: The ability to provide earthworks and civil infrastructure capabilities is a great example of the group's differentiated end-to-end offering, which sets us apart in the sector. The US is slightly down, mainly due to civils, where we are commencing delivery of the three highway projects announced in recent periods. In US buildings, new secured orders include the data centers and aviation contracts which Philip mentioned earlier. Gammon order book increased by 15%, including the contract award for a railway station in Hong Kong's Northern Metropolis development area. We expect this to be a strong demand channel for Gammon in the medium term, with related projects already making up 30% of the order book at half year. Finally, within support services, we secured a GBP 315 million highways maintenance contract in Warwickshire.

Speaker #3: The US is slightly down, mainly due to civils, where we're commencing delivery of the three highway projects announced in recent periods. And in US buildings, new secured orders include the data centers and aviation contracts which Philip mentioned earlier.

Speaker #3: Gammon's order book increased by 15%, including the contract award for a railway station in Hong Kong's Northern Metropolis Development Area. We expect this to be a strong demand channel for Gammon in the medium term, with related projects already making up 30% of the order book at the half-year.

Myles Westcott: Gammon order book increased by 15%, including the contract award for a railway station in Hong Kong's Northern Metropolis development area. We expect this to be a strong demand channel for Gammon in the medium term, with related projects already making up 30% of the order book at half year. Finally, within support services, we secured a GBP 315 million highways maintenance contract in Warwickshire.

Speaker #3: Finally, within Support Services, we secured a £315 million highways maintenance contract in Warwickshire. In addition to the order book, we continue to have a significant pipeline of further work for which we've been selected.

Myles Westcott: In addition to the order book, we continue to have a significant pipeline of further work for which we have been selected, including the GBP 6 to 8 billion of power projects which we are currently in the design phases of. We expect to convert the majority of these schemes to order book in the next 18 months as we move into the construction phase. Moving now to our infrastructure investments business, where the important news in the H1 was the conclusion of the monitorship. The predisposal loss, which was in line with the prior year, was once again primarily due to costs incurred in relation to that monitorship. We also disposed of two US assets in the H1, both of which were completed at or above the director's valuation.

Speaker #3: Including the £6 to £8 billion of power projects, which we're currently in the design phases of. We expect to convert the majority of these schemes to the order book in the next 18 months, as we move into the construction phase.

Speaker #3: Moving now to our Infrastructure Investments business, the important news in the first half was the conclusion of the monitorship. The predisposal loss, which was in line with the prior year, was once again primarily due to costs incurred in relation to that monitorship.

Speaker #3: We also disposed of two US assets in the first half, both of which were completed at or above the directors' valuation. And now, moving to that directors' valuation of the investments portfolio, and taking the bridge from left to right, we invested £15 million in the period in new and existing projects.

Myles Westcott: Now moving to that director's valuation of the investments portfolio and taking the bridge from left to right, we invested GBP 15 million in the period in new and existing projects. Sales proceeds from the two disposals totaled GBP 12 million, and we received GBP 15 million in distributions from the portfolio. The unwind of the discount increased the valuation by GBP 36 million, and the foreign exchange movement was a GBP 12 million benefit as the US dollar strengthened. After those movements, the director's valuation of portfolio is maintained at around GBP 1.1 billion. Looking at cash now. Another area where performance has been strong throughout the H1. With average cash in the period of GBP 1.6 billion and a closing balance of GBP 1.7 billion. Let me touch on four of the items here to add a bit more color.

Speaker #3: Sales proceeds from the two disposals totaled £12 million, and we received £15 million in distributions from the portfolio. The unwind of the discount increased the valuation by £36 million, and the foreign exchange movement was a £12 million benefit, as the US dollar strengthened.

Speaker #3: After those movements, the Director's valuation of the portfolio is maintained at around £1.1 billion. Okay, looking at cash now—another area where performance has been strong throughout the first half.

Speaker #3: We'll average cash in the period of £1.6 billion, and a closing balance of £1.7 billion. Let me touch on four of the items here to add a bit more colour.

Speaker #3: Firstly, operating cash flow of £151 million represents strong underlying cash conversion across the group, and is an important focus for all of our businesses.

Myles Westcott: Firstly, operating cash flow of GBP 151 million represents strong underlying cash conversion across the group and is an important focus for all of our businesses. Moving to working capital, as you know, for most of the work we do, we tend to be paid in advance. As a result, we have a strong negative working capital position. This grew in the H1, largely due to new project starts in the US together with the rising demand in power. For pensions, as we set out back in March, and as agreed with the trustees of our largest pension fund, we have made a GBP 30 million contribution with no further contributions expected. Finally, the share buyback program is progressing well. We are on track to complete the full GBP 200 million by the year-end.

Speaker #3: And moving to working capital. As you know, for most of the work we do, we tend to be paid in advance. As a result, we have a strong negative working capital position.

Speaker #3: This grew in the first half, largely due to new project starts in the US, together with the rising demand in power. For pensions, as we set out back in March, and as agreed with the trustees of our largest pension fund, we've made a £30 million contribution, with no further contributions expected.

Speaker #3: And finally, the share buyback programme is progressing well. We're on track to complete the full £200 million by the year end. Okay, finally, turning to the outlook for the full year, we've updated our guidance in three areas.

Myles Westcott: Finally, turning to outlook for the full year, we have updated our guidance in three areas. For the earnings-based businesses, given the strong start to the year, we are now expecting to deliver low double-digit PFO growth, which is slightly ahead of our previous guidance. No change in our guidance for infrastructure investments. For net finance income, given the strong cash position, we are increasing our guidance to a range of GBP 35 to 40 million. No change to the expected P&L charge, which will be close to statutory rates. Finally, cash, following the very strong H1, we are upgrading the guidance for average net cash to a range of GBP 1.5 to 1.7 billion.

Speaker #3: For the earnings-based businesses, given the strong start to the year, we're now expecting to deliver low double-digit PFO growth, which is slightly ahead of our previous guidance.

Speaker #3: No change in our guidance for infrastructure investments. And for net finance income, given the strong cash position, we're increasing our guidance to a range of £35 to £40 million.

Speaker #3: No change to the expected P&L charge, which will be close to statutory rates. And finally, cash. Following the very strong first half, we're upgrading the guidance for average net cash to a range of £1.5 to £1.7 billion.

Myles Westcott: Finally, cash, following the very strong H1, we are upgrading the guidance for average net cash to a range of GBP 1.5 to 1.7 billion. In summary, we have had an encouraging H1 of the year in terms of both profit and cash, which, when combined with our strong order book and momentum in our growth markets, gives me confidence in the group achieving the guidance set out today. With that, I will hand you back to Philip.

Speaker #3: In summary, we've had an encouraging first half of the year in terms of both profit and cash which, when combined with our strong order book and momentum in our growth markets, gives me confidence in the Group achieving the guidance set out today.

Myles Westcott: In summary, we have had an encouraging H1 of the year in terms of both profit and cash, which, when combined with our strong order book and momentum in our growth markets, gives me confidence in the group achieving the guidance set out today. With that, I will hand you back to Philip.

Speaker #3: With that, I'll hand you back to Philip.

Speaker #2: Thank you, Ralph. Obviously, we're pleased with that first-half performance. What I’d like to do now is spend a few moments talking about future momentum and how we see the development of Balfour Beatty, as well as the unlocking of that next chapter of growth.

Philip Hoare: Thank you, Mark. We are pleased with that H1 performance. What I wanted to do now is just spend a few moments talking about future momentum and how we see the development of Balfour Beatty and the unlocking of that next chapter of growth. Firstly, I guess to start, just to remind you of our strong and diversified portfolio as a group. Our focus on our core geographies in the UK, the US, and in Asia. The real sense of driving growth across those focused growth markets that we are operating in, UK energy, UK defense, UK transport, and US buildings. Then the new profitable growth framework that we have put in place under Evolve, Energise, and Explore. I guess what I wanted to particularly pick out through here is the end-to-end capability, which I think is a real differentiator for us as an organization.

Philip Hoare: Thank you, Myles. We are pleased with that H1 performance. What I wanted to do now is just spend a few moments talking about future momentum and how we see the development of Balfour Beatty and the unlocking of that next chapter of growth. Firstly, I guess to start, just to remind you of our strong and diversified portfolio as a group. Our focus on our core geographies in the UK, the US, and in Asia. The real sense of driving growth across those focused growth markets that we are operating in, UK energy, UK defense, UK transport, and US buildings. Then the new profitable growth framework that we have put in place under Evolve, Energise, and Explore. I guess what I wanted to particularly pick out through here is the end-to-end capability, which I think is a real differentiator for us as an organization.

Speaker #2: So firstly, I guess to start, just to remind you of our strong and diversified portfolio as a group. So our focus on our core geographies in the UK, the US, and in Asia, the real sense of driving growth across those focused growth markets that we're operating in, UK Energy, UK Defence, UK Transport, and US Buildings.

Speaker #2: And then the new profitable growth framework that we've put in place, under Evolve, Energise, and Explore. But I guess what I wanted to particularly pick out through here is the end-to-end capability, which I think is a real differentiator for us as an organisation.

Speaker #2: The ability to bring design and engineering through project management into construction management, on into construction, and then onto O&M—underpinned by our ability to bring project finance to those key projects—I think is something that really sets us apart from the competition.

Philip Hoare: The ability to bring design and engineering through project management into construction management, on into construction, and then onto O&M, underpinned by our ability to bring project finance to those key projects, I think is something that really sets us apart from the competition. As we grow and develop, we look to strengthen those connections across that part of our organization to enable us to get really close to our customers and help them deliver their demands as they move forward. The whole thing is underpinned then, isn't it, by the strength of our order book at GBP 23 billion and our investments portfolio at GBP 1.1 billion. I think overall, this really positions us to grow well into the future with lots of momentum to come, in terms of the value of our business.

Speaker #2: And as we grow and develop, we look to strengthen those connections across that part of our organisation to enable us to get really close to our customers and help them deliver their demands as they move forward.

Speaker #2: And then, of course, the whole thing is underpinned, isn't it, by the strength of our order book at £23 billion and our investments portfolio at £1.1 billion.

Speaker #2: So I think, overall, this really positions us to grow well into the future, with lots of momentum to come in terms of the value of our business.

Speaker #2: But let me just talk to you in a little more detail about the profitable growth framework and what this means in terms of value creation for our stakeholders.

Philip Hoare: Let me just talk to you in a little bit more detail about the profitable growth framework and what this means in terms of long-term value creation for our stakeholders. Firstly, as a reminder, Evolve, Energise, and Explore. Evolve is all about strengthening the core of our business. It is about making sure that we are driving margin improvement across every aspect of our organization. It is about making sure that the robust governance processes that we have in place help us drive operational excellence from the selection, the winning, and then the delivery of the projects that are in our care. Of course, it is about advancing our people strategy, making sure that we can attract and retain the best talent that this industry has to offer. Turning to Energise, this is all about accelerating profitable growth. We have picked a number of key areas there.

Speaker #2: So firstly, as a reminder, Evolve, Energise, and Explore Evolve is all about strengthening the core of our business. It's about making sure that we're driving margin improvement across every aspect of our organisation.

Speaker #2: It's about making sure that the robust governance processes that we have in place help us drive operational excellence from the selection, the winning, and then the delivery of the projects that are in our care.

Speaker #2: And of course, it's about advancing our people strategy—making sure that we can attract and retain the best talent that this industry has to offer.

Speaker #2: Turning to Energise—this is all about accelerating profitable growth, and we've picked a number of key areas there. So firstly, for me, this is about really being close to our customers, understanding their demands, and making sure that we're agile enough to be able to respond to that.

Philip Hoare: Firstly, for me, this is about really being close to our customers, understanding their demands, making sure that we are agile enough to be able to respond to that. The deeper those relationships are, I think the better our business will be. It is absolutely about driving growth in the US, and I will come onto that in a moment, and then accelerating growth in those UK growth markets that we have indicated. Finally, Explore is about shaping what is next. It is about scanning that horizon. It is thinking about technology and adjacencies that will enable us to grow faster and are stronger as an organization. Of course, you have got to measure all this, don't you? In terms of how we are looking at that from a long-term value creation perspective, at the forefront will always be safety. It is about returning everyone home safe at the end of every day.

Speaker #2: The deeper those relationships are, I think the better our business will be. It's absolutely about driving growth in the US, and I'll come on to that in a moment.

Speaker #2: And then, accelerating growth in those UK growth markets that we've indicated. And then finally, Explore is about shaping what's next—it's about scanning that horizon.

Philip Hoare: Finally, Explore is about shaping what is next. It is about scanning that horizon. It is thinking about technology and adjacencies that will enable us to grow faster and are stronger as an organization. Of course, you have got to measure all this, don't you? In terms of how we are looking at that from a long-term value creation perspective, at the forefront will always be safety. It is about returning everyone home safe at the end of every day.

Speaker #2: It's thinking about technology and adjacencies that will enable us to grow faster and stronger as an organisation. But, of course, you've got to measure all this, don't you?

Speaker #2: And so, in terms of how we're looking at that from a long-term value creation perspective, at the forefront will always be safety. It's about returning everyone home safe at the end of every day.

Speaker #2: We have a big responsibility around sustainability, and where our clients demand that, bringing the best sustainable solutions that we can to the projects that we are operating.

Philip Hoare: We have a big responsibility around sustainability and where our clients demand that, bringing the best sustainable solutions that we can to the projects that we are operating. It is absolutely about being focused on our customers and recognizing that their feedback to us is important in terms of how we shape our business into the future. Of course, being an employer of choice. As I said, our ability to attract and retain talent is the future of our company, and therefore incredibly important that we get this right so we can bring the best people to the best projects to support our customers. Finally, I think if we get all of that right, then actually the outcome will be that we will drive and continue to drive profitable growth across the organization.

Speaker #2: It's absolutely about being focused on our customers and recognising that their feedback to us is important in terms of how we shape our business in the future.

Speaker #2: And, of course, being an employer of choice. As I said, our ability to attract and retain talent is the future of our company and, therefore, it is incredibly important that we get this right, so we can bring the best people to the best projects to support our customers.

Speaker #2: And finally, I think if we get all of that right, then actually the outcome will be that we will drive, and continue to drive, profitable growth across the organisation.

Speaker #2: So we've made real momentum on this programme in the first half of the year, and I just wanted to highlight some of the areas that we are focused on.

Philip Hoare: We have made real momentum on this program in the H1 of the year, and I just wanted to highlight some of the areas that we are focused on. The first one's under Evolve, strengthening the core, is all about driving margin improvement. We have plans progressing in every aspect of our business and each of our functions in terms of unlocking that future margin potential in our business. You would have seen that earlier this year, I reshaped our UK operations to be really focused on those growth markets and, of course, the customers that we serve in each of those growth markets. It is about getting that focus in terms of how we will drive the business forward into the future. I have also invested significantly in leadership capability.

Speaker #2: So, the first ones under Evolve, strengthening the core, is all about driving margin improvement. And we have plans progressing in every aspect of our business and each of our functions, in terms of unlocking that future margin potential in our business.

Speaker #2: You will have seen that, earlier this year, I reshaped our UK operations to be really focused on those growth markets—and, of course, the customers that we serve in each of those growth markets.

Speaker #2: So, it's about getting that focus, in terms of how we'll drive the business forward into the future. I've also invested significantly in leadership capability—not only is this promoting people from within the organisation, it's about new hires into our company, and it's fundamentally thinking about how we support the training and development of our key leaders.

Philip Hoare: Not only is this promoting people from within the organization, it is about new hires into our company, and it is fundamentally thinking about how we support the training and development of our key leaders. I have launched a new executive leadership development program in conjunction with London Business School and MIT, which is all about upskilling and upgrading our leaders to be able to best support the markets that we are operating in. Then finally, and something that is really close to my heart, is the development of a One Balfour Beatty culture. This is all about taking and evolving our culture to the next level, where we are collaborating super effectively across the company. We are able to bring the best of Balfour Beatty to our customers wherever they are in the world. I think this will have important ramifications for how we grow the business into the future.

Speaker #2: So, I've launched a new executive leadership development programme, in conjunction with London Business School and MIT, which is all about upskilling and upgrading our leaders to be able to best support the markets that we're operating in.

Speaker #2: And then finally, something that's really close to my heart is the development of a "One Balfour Beatty" culture. This is all about taking and evolving our culture to the next level, where we're collaborating super effectively across the company and are able to bring the best of Balfour Beatty to our customers, wherever they are in the world.

Philip Hoare: Then finally, and something that is really close to my heart, is the development of a One Balfour Beatty culture. This is all about taking and evolving our culture to the next level, where we are collaborating super effectively across the company. We are able to bring the best of Balfour Beatty to our customers wherever they are in the world. I think this will have important ramifications for how we grow the business into the future.

Speaker #2: And I think this will have important ramifications for how we grow the business into the future. On Energise, it really is about getting close to our customers and putting customers first in terms of how we deliver.

Philip Hoare: On Energise, it really is about getting close to our customers and putting customer first in terms of how we deliver. We have a new program, a global program, going on across our business that is really thinking about how we get laser focused on our customers. Then finally, over the first part of the year, we have been working on an accelerated US growth plan, which will enable us to grow in those areas we are already operating in, as well as focusing on a number of market verticals which we have already described. Then finally on Explore, the shaping what is next. We have made an investment of GBP 10 million in Pi Labs. This is all about connecting new technology that is going to help us drive productivity and efficiency at the front line on the projects we serve.

Speaker #2: And we have a new programme—a global programme—going on across our business that's really thinking about how we get laser-focused on our customers.

Speaker #2: And then finally, over the first part of the year, we've been working on an accelerated US growth plan, which will enable us to grow in those areas we're already operating in, as well as focusing on a number of market verticals, which we've already described.

Speaker #2: And then finally, on Explore, the shaping what's next. We've made an investment of £10 million in Pi Labs. So this is all about connecting new technology that's going to help us drive productivity and efficiency at the front line on the projects we serve.

Speaker #2: I think this is a really exciting development for Balfour Beatty, because the way that we connect people, data, and technology in the future will be key to driving those productivity and efficiency gains that our customers need.

Philip Hoare: I think this is a really exciting development for Balfour Beatty because the way that we connect people, data, and technology into the future will be key to driving those productivity and efficiency gains that our customers need. Then finally, we have begun to assess priorities across the UK and the US in terms of adjacencies that will help strengthen our market position. Overall, I think we are making great momentum. Evolve, Energise, and Explore has landed well and truly in our organization, but it is fundamentally all about creating long-term value for all of our stakeholders. Let me now summarize where we are. We have a really powerful platform for growth demonstrated through the strong H1 momentum we have in the business and the slightly upgraded guidance that we have given for the H2 of the year.

Speaker #2: And then, finally, we've begun to assess priorities across the UK and the US in terms of adjacencies that will help strengthen our market position.

Speaker #2: So overall, I think we're making great momentum. Evolve, Energise, and Explore has landed well and truly in our organisation. But it's fundamentally all about creating long-term value for all of our stakeholders.

Speaker #2: So let me now summarise where we are. We have a really powerful platform for growth, demonstrated through the strong first-half momentum we have in the business and the slightly upgraded guidance that we've given for the second half of the year.

Speaker #2: But well beyond that, I think, in terms of the momentum we have in the organisation, our order book is significant and of high quality.

Philip Hoare: But well beyond that, I think in terms of the momentum we have in the organization. Our order book is significant and of high quality, and we are really well-positioned in the growing markets that we have chosen because of their long-term growth potential and the ability to bring our great depth of expertise to those customers. We have absolutely retained the disciplined governance processes that have enabled us and afforded us the opportunity to grow. And our robust balance sheet, along with our consistent capital allocation framework, can give you certainty about where the company is headed. Then finally, under Evolve, Energise, and Explore, we really do have fantastic momentum into the future. So when I take all of those things together, I have a high degree of confidence in our ability to create long-term value and sustainable returns for all of our shareholders and stakeholders.

Speaker #2: And we're really well positioned in the growing markets that we've chosen because of their long-term growth potential and the ability to bring our great depth of expertise to those customers.

Speaker #2: We’ve absolutely retained the disciplined governance processes that have enabled us, and afforded us the opportunity to grow. And our robust balance sheet, along with our consistent capital allocation framework, can give you certainty about where the company is headed.

Philip Hoare: And our robust balance sheet, along with our consistent capital allocation framework, can give you certainty about where the company is headed. Then finally, under Evolve, Energise, and Explore, we really do have fantastic momentum into the future. So when I take all of those things together, I have a high degree of confidence in our ability to create long-term value and sustainable returns for all of our shareholders and stakeholders. So thank you very much, Myles and Al. Myles and I now look forward to your questions.

Speaker #2: And then finally, under Evolve, Energise, and Explore, we really do have fantastic momentum into the future. So, when I take all of those things together, I have a high degree of confidence in our ability to create long-term value and sustainable returns for all of our shareholders and stakeholders.

Speaker #2: So, thank you very much, Miles and Al. Miles and I now look forward to your questions.

Philip Hoare: So thank you very much, Myles and Al. Myles and I now look forward to your questions.

Speaker #1: Philip, Miles.

Speaker #3: Right. So we're going to start in the room. We do actually have some questions on the iPad as well, so we'll do an iPad, then we'll go to the phones.

[Company Representative] (Balfour Beatty): Right. So we are going to start in the room. We do actually have some questions on the iPad as well.

Philip Hoare: Okay, great.

[Company Representative] (Balfour Beatty): So we'll do iPad, then we'll go to the phones. If I could ask for your hand up and wait for the mic to get to you, then we get going. Thank you.

Speaker #3: So, I've got to ask you to put your hand up and wait for the mic to get to you, and then get going. Thank you.

Speaker #4: Thanks. Ainsley Lemmer from Investa. Just two for me, please. I wondered if you could—when we look at the kind of support service margin over 9%—is that sustainable from here on out?

[Company Representative] (Investec): Thanks. Angus from Investec. Just two from me, please. I wondered if you could. When we look at the kind of support service margin over 9%, is that sustainable from here on out? Is it the mix has improved and therefore we should expect that for the full year and into next? Then secondly, with the US monitorship kind of finished now, when you look at that US military asset, it's quite a big chunk of the investment portfolio. What's your view on that? If you were to sell it, would you recycle it into more investments or any other options you'd think about there?

Angus Bruce-Gardyne: Thanks. Angus from Investec. Just two from me, please. I wondered if you could. When we look at the kind of support service margin over 9%, is that sustainable from here on out? Is it the mix has improved and therefore we should expect that for the full year and into next? Then secondly, with the US monitorship kind of finished now, when you look at that US military asset, it's quite a big chunk of the investment portfolio. What's your view on that? If you were to sell it, would you recycle it into more investments or any other options you'd think about there?

Speaker #4: Is it that the mix has improved, and therefore we should expect that for the full year and into next? And then secondly, with the US monitorship kind of finished now, when you look at that US military asset, it's quite a big chunk of the investment portfolio.

Speaker #4: What's your view on that? If you were to sell it, would you recycle it into more investments, or are there any other options you'd think about there?

Speaker #5: Yes, certainly. First, if I take the monitorship question first and then come back to you on support services. So just in terms of the monitorship, I mean, ultimately our main goal, firstly, was to end the monitorship.

Philip Hoare: Yeah, certainly. Perhaps if I take the monitorship question first and come back to you on support services. Just in terms of the monitorship, I mean, ultimately, our main goal firstly was to end the monitorship. So obviously pleased to have done that. I think where we are now, it's really important that we embed and sustain what we've done in terms of improving the quality of the business. So our focus remains on delivering a great service for the American servicemen and women that live in those properties. So that's our immediate focus.

Speaker #5: And so, obviously, I'm pleased to have done that. I think, where we are now, it's really important that we embed and sustain what we've done in terms of improving the quality of the business.

Speaker #5: And so, our focus remains on delivering great service for the American servicemen and women who live in those properties. So that's our immediate focus.

Speaker #1: OK. And on the Support Services margin?

[Company Representative] (Investec): Okay. And on the support services margin.

Angus Bruce-Gardyne: Okay. And on the support services margin.

Philip Hoare: Look, we are delighted with the strong start to the year. 9.1% is an excellent performance, which was actually a margin increase in both the Power and the Transportation divisions within Support Services. Going forward, I think the momentum we have got will continue. Whether we will stay at 9.1% by the full year, I am not so sure, but we will get close to 9%.

Speaker #5: We're delighted with the strong start to the year. 9.1% is an excellent performance, which was actually a margin increase in both the Power and the Transportation divisions within Support Services.

Speaker #5: Going forward, yeah, I think the momentum we've got will continue. Whether we'll stay at 9.1% for the full year, I'm not so sure. But we'll get close to 9%.

Speaker #4: Thanks. Johnny Kubra from Deutsche Nemesis. Can I ask a follow-up question on power? As you move from Part A to Part B on these contracts, how will the terms and conditions change, and what risk will you take on?

Johnny Kubra: Thanks. Johnny Kubra from Deutsche Numis. Can I ask a follow-up question on Power? As you move from Part A to Part B on these contracts, how will the terms and conditions change and the risk that you take on?

Johnny Coubrough: Thanks. Johnny Coubrough from Deutsche Numis. Can I ask a follow-up question on Power? As you move from Part A to Part B on these contracts, how will the terms and conditions change and the risk that you take on?

Speaker #5: Yeah, certainly. So, I mean, obviously, this is a well-trodden path. And actually, one of the things that we're really keen on is this model, because what happens during part A is that we're absolutely an intrinsic part of the design and development of those projects. That means that by the time we come to submit the final price for those works, that's something we have a high degree of confidence in.

Philip Hoare: Yeah, certainly. This is a well-trodden path and actually, one of the things that we are really keen on is this model, because what happens during Part A, is that we are absolutely an intrinsic part of the design and development of those projects. That means that by the time we come to submit the final price for those works, that is something we have a high degree of confidence in. So, we really welcome the model and I guess progressing, with our clients on that.

Speaker #5: So we really welcome the model, and I guess we're progressing with our clients on that.

Speaker #1: Thanks very much. And also.

Johnny Kubra: Thanks very much. Also on, U.S. Civils. I think you said, Myles, that it delivered a much reduced loss in the H1. So still loss-making. Can we take it that Buildings is doing a 2% management fee margin, on a run rate basis?

Johnny Coubrough: Thanks very much. Also on, U.S. Civils. I think you said, Myles, that it delivered a much reduced loss in the H1. So still loss-making. Can we take it that Buildings is doing a 2% management fee margin, on a run rate basis?

Speaker #4: So on US Civils, I think you said, Miles, that it delivered a much reduced loss in the first half—still loss-making. Can we take it that Buildings are doing a 2% management fee margin on a run-rate basis?

Speaker #5: I think between Civils and Buildings, we had a big step up in performance from the first half of last year to the first half of this year.

Myles Westcott: I think between civils and buildings, we had a big step up in performance from the H1 of last year to the H1 of this year. You will recall the Texas Highway project has been a drag on profitability, so that has got us to where we are now. I think between the two divisions, we would expect a pick up in that margin as we approach the full year. And yeah, US buildings are long-term. We have talked about it before. 1.5% to 2% is where it should end up.

Speaker #5: You'll recall a Texas highway project has been a drag on profitability, so that's got us to where we are now. I think between the two divisions, we would expect a pickup in that margin as we approach the full year.

Speaker #5: And, yeah, US buildings—our long term—we've talked about it before: one and a half to two percent is where it should end up.

Speaker #4: Thanks very much. And last one from me is just on the threes and exploring adjacencies. Could this mean adding an additional growth market to your existing ones?

Johnny Kubra: Thanks very much. Last one from me is just on the three E's and exploring adjacencies. Could this mean adding an additional growth market to your existing ones, and can that be done organically, or do you think that would involve acquisitions?

Johnny Coubrough: Thanks very much. Last one from me is just on the three E's and exploring adjacencies. Could this mean adding an additional growth market to your existing ones, and can that be done organically, or do you think that would involve acquisitions?

Speaker #4: And can that be done organically, or do you think this would involve acquisitions?

Speaker #5: Yeah, so, I mean, look, our absolute focus is on organic growth. I mean, I think you've seen the momentum that we believe we can see in those markets, and those chosen growth markets, moving forward.

Philip Hoare: Yeah. Our absolute focus is on organic growth. I think you have seen the momentum that we believe we can see in those markets and those chosen growth markets moving forward. So that is our priority.

Speaker #5: So that's our priority.

Speaker #4: Hi, Rob Tantric Berenberg, and thanks for the presentation. Three questions from me, all in the US. I guess firstly, following up from Johnny's question, could you just help us frame the longer-term margin dynamics in the US after, I guess, moving away from civils and towards buildings?

Rob Chantry: Hi, Rob Chantry at Berenberg. Thanks for the presentation. Three questions from me, all on the US. I guess firstly, following up from Johnny's question, could you just help us frame the longer-term margin dynamics in the US after, I guess, moving away from civils and towards buildings, principally in terms of, I guess, the risk taken on in that 1.5% to 2% building margin and how you manage that? Secondly, US data center market. Any indication on, I guess, the progress year-on-year and the percentage of a book that it is in the US and any differences in economics you receive compared to more traditional areas? Then thirdly, I am not sure this is the correct phrasing to ask you, but in terms of capacity utilization in the US.

Speaker #4: Principally, in terms of, I guess, the risk taken on in that 1.5 to 2% building margin, and how you manage that.

Speaker #4: Secondly, US data center market—any indication on, I guess, the progress year-on-year and the percentage of your book that it is in the US? And any differences in economics you receive compared to more traditional areas?

Rob Chantry: Any indication on, I guess, the progress year-on-year and the percentage of a book that it is in the US and any differences in economics you receive compared to more traditional areas? Then thirdly, I am not sure this is the correct phrasing to ask you, but in terms of capacity utilization in the US. In terms of the teams, is there a battle for talent given how buoyant the broader markets are? Any bottlenecks given the 19% growth? Effectively, how busy are the team and how much more is there to go with the team you've got there in the US?

Speaker #4: And thirdly, I'm not sure this is the correct phrasing to ask it, but in terms of capacity utilization in the US, in terms of the teams, is there a battle for talent given how buoyant the broader market size is?

Rob Chantry: in terms of the teams, is there a battle for talent given how buoyant the broader markets are? Any bottlenecks given the 19% growth? Effectively, how busy are the team and how much more is there to go with the team you've got there in the US?

Speaker #4: Are there any bottlenecks given the 19% growth? Effectively, how busy is the team and how much more can you do with the team you've got there in the US?

Speaker #5: OK, great. I’ll take all three of those. But if you want to chip in, Miles, please do. So I guess in terms of the longer-term dynamics of the market—and we've already talked about building margins being between 1.5% and 2%.

Philip Hoare: Okay, great. I'll take all three of those, but if you want to chip in, Myles, please do. I guess in terms of the longer-term dynamics of the market, and we've already talked about building margins being between 1.5% and 2%, and you can see, look, our overall mix is about 90/10. So 90% of our revenue is from the buildings market and 10% from civils. And that's broadly the mix that I'd like to maintain as we move forward, obviously, with some growth in there overall. From a UK data centers perspective, if you look at our overall order book, 6% of our order book in the US is in data centers. I do expect that to increase, and I expect that to get into probably a double-digit percentage in terms of how that looks moving forward. But I think the key thing about our US

Speaker #5: And you can see, look, our overall mix is about 90/10—so 90% of our revenue is from the Buildings market and 10% from Civils. And that's broadly the mix that I'd like to maintain as we move forward.

Speaker #5: Obviously, with some growth in there overall. From a UK data centers perspective, if you look at our overall order book, 6% of our order book in the US is in data centers.

Speaker #5: I do expect that to increase, and I expect that to get into probably a double-digit percentage in terms of how that looks moving forward.

Speaker #5: But I think the key thing about our US business is the ability to remain agile. If I look back at our order book five years ago, we were at a double digit.

Philip Hoare: But I think the key thing about our US business is the ability to remain agile. If I look back at our order book five years ago, we were at double digit and strongly double digits on commercial and residential, and we're not because the market changed. And so it's about being able to take our capability and flex that across the buildings market environment, which I think we are very adept at doing. And I guess just to be clear, it'll be important not to be overweight on data centers and we'll make sure that the balance remains in our business. And then finally, I think just a question on capacity.

Philip Hoare: business is the ability to remain agile. If I look back at our order book five years ago, we were at double digit and strongly double digits on commercial and residential, and we're not because the market changed. And so it's about being able to take our capability and flex that across the buildings market environment, which I think we are very adept at doing. And I guess just to be clear, it'll be important not to be overweight on data centers and we'll make sure that the balance remains in our business. And then finally, I think just a question on capacity. Well, look, talent is always a challenge and our ability to attract and retain the best talent in the industry, will be a constant challenge for us now and into the future. But I think we have a great employee value proposition.

Speaker #5: And it's strongly double digits on commercial and residential. And we're not, because the market changed. So it's about being able to take our capability and flex that across the buildings market environment, which I think we are very adept at doing.

Speaker #5: And I guess, just to be clear, it'll be important not to be overweight on data centers, and we'll make sure that the balance remains in our business.

Speaker #5: And then finally, I think just a question on capacity. Well, look, talent is always a challenge, and our ability to attract and retain the best talent in the industry will be a constant challenge for us now and into the future.

Philip Hoare: Well, look, talent is always a challenge and our ability to attract and retain the best talent in the industry, will be a constant challenge for us now and into the future. But I think we have a great employee value proposition. Look at the incredible work that we're doing, and therefore, I think we remain an attractive brand for people to want to join.

Speaker #5: But I think we have a great employee value proposition. Look at the incredible work that we're doing and, therefore, I think we remain an attractive brand for people to want to join.

Philip Hoare: Look at the incredible work that we're doing, and therefore, I think we remain an attractive brand for people to want to join.

Speaker #1: Thank you.

Speaker #4: Good morning, Andrew Nassi from Pearl Hunt. A couple of questions as well, please. First of all, when we look at working capital as a percentage of revenue, it increased to negative 19% versus negative 17%, which is obviously significantly higher than sort of the long-run average.

Andrew Nussey: Good morning, Andrew Nussey from Peel Hunt. A couple of questions as well, please. First of all, when we look at working capital as a percentage of revenue, it increased to -19% versus -17%, which you'll see is significantly higher than the long run average. You gave us a feel for the drivers behind that, but those drivers do not look like they are going to change anytime soon. So what are your thoughts over perhaps the medium term in terms of how that might shape? Secondly, in Support Services, the drop-through from that revenue increase was very significant. Again, you gave some reasons behind it, but were there any sort of one-offs in there that might impact the margin next year and going forward?

Speaker #4: You gave us a feel for the drivers behind that. But those drivers don't look like they're going to change any time soon. So what are your thoughts, over perhaps the medium term, in terms of how that might shape?

Speaker #4: And secondly, in Support Services, the drop-through from that revenue increase was very significant. Again, you gave some reasons behind it. But I just wondered, were there any sort of one-offs in there that might impact the margin next year and going forward?

Speaker #5: Thanks very much. Look, firstly, working capital. As you say, very strong performance, around about 19% of revenue. We've talked in the past about 15% to 18% being the sort of level we'd set that.

Myles Westcott: Thanks very much. Look, firstly, working capital. As you say, very strong performance, around about 19% of revenue. We have talked in the past about 15% to 18% being the sort of level we would set that. I think that is still the case. That is why we are holding our average cash, increasing our guidance. So our average cash is around about GBP 1.6 billion by the year-end. You are also aware these are down mobilization payments on our contracts. If the style of contract continues and the growth continues, then we are going to continue with that sort of 15% to 18% negative working capital. But that cash is needed to deliver the programs. So we will get. If we may see some further inflows given the growth that Philip set out, there will also be outflows to deliver the programs.

Speaker #5: I think that's still the case. That's why we're holding our average cash—i.e., increasing our guidance. So our average cash is around about £1.6 billion by the year end.

Philip Hoare: That is why we are holding our average cash, increasing our guidance. So our average cash is around about GBP 1.6 billion by the year-end. You are also aware these are down mobilization payments on our contracts. If the style of contract continues and the growth continues, then we are going to continue with that sort of 15% to 18% negative working capital. But that cash is needed to deliver the programs. So we will get. If we may see some further inflows given the growth that Philip set out, there will also be outflows to deliver the programs. Sorry, second question. Second question was about the drop-through. Thank you. On Support Services, it was a great H1, 9.1% is great performance by the teams.

Speaker #5: And you're also aware these are mobilization payments on our contracts. If the style of contract continues and the growth continues, then we are going to continue with that sort of 15% to 18% negative working capital.

Speaker #5: But that cash is needed to deliver the programs. So we will, yeah, whilst we may see some further inflows given the growth that Philip set out, there will also be outflows to deliver the programs.

Speaker #5: Sorry, second question.

Myles Westcott: Sorry, second question. Second question was about the drop-through. Thank you. On Support Services, it was a great H1, 9.1% is great performance by the teams. In the H2, we have got some of these early start contracts, which the drop-through, we will see an increase in PFO in the H2, but I just would not say 9.1% is the new normal yet.

Speaker #1: The second question is about the drop-through.

Speaker #5: Thank you. Thank you. As on Support Services, it was a great first half—9.1% is great performance by the teams. In the second half, we have got some of these early start contracts, with the drop-through, and we will see an increase in PFO in the second half.

Philip Hoare: In the H2, we have got some of these early start contracts, which the drop-through, we will see an increase in PFO in the H2, but I just would not say 9.1% is the new normal yet.

Speaker #5: But I just wouldn't say 9.1% is the new normal yet.

Speaker #1: Are there any one-offs?

Graham Hunt: Was there any one-offs?

Andrew Nussey: Was there any one-offs?

Speaker #5: No. Just good performance.

Philip Hoare: No, just good performance.

Graham Hunt: Thank you. Graham Hunt from Jefferies. Just two questions for me, please. On US civils, you talk about some highways projects starting up there. Should we be happy about that? Can you give us some confidence that they are going to be margin accretive? You said 90/10 is kind of the target for that US business in terms of building civils, but why is that? You've got peers of yours are doing much better in the civils market from a margin perspective. Could you not have ambition to do a bit more there? That's the first question. Then second question, just on your investment portfolio, that's been steady around that billion level for quite some time now. How are you thinking about that going forward? The rest of your business has grown quite a lot.

Speaker #4: Thank you, Graham Hunt from Jefferies. Just two questions from me, please. On US civils, you talked about some highways projects starting up there.

Speaker #4: Should we be happy about that? Can you give us some confidence that they are going to be margin accretive? And you said 90/10 is kind of the target for that U.S. business in terms of buildings and civils.

Speaker #4: But why is that? You’ve got peers of yours who are doing much better in the civils market from a margin perspective. Could you not have the ambition to do a bit more there?

Speaker #4: That's the first question. And then second question, just on your investment portfolio, that's been steady around that billion level for a long or for quite some time now.

Graham Hunt: Then second question, just on your investment portfolio, that's been steady around that billion level for quite some time now. How are you thinking about that going forward? The rest of your business has grown quite a lot. We have been talking, I think, in past quarters about the UK PPP market potentially coming back. We've had a bit of a change of government set up. What's the latest you're hearing on that side? Thank you.

Speaker #4: How are you thinking about that going forward? The rest of your business has grown quite a lot. We have been talking, I think, in past quarters about the UK PPP market potentially coming back.

Graham Hunt: We have been talking, I think, in past quarters about the UK PPP market potentially coming back. We've had a bit of a change of government set up. What's the latest you're hearing on that side? Thank you.

Speaker #4: We've had a bit of a change in government setup. What's the latest you're hearing on that side? Thank you.

Speaker #5: Yeah, great. OK. So just taking US Civils first—so, I think we talked about our strategy previously in US Civils, which is: following the issues that we had in Texas, we did scale back our business to the point where we felt really comfortable about moving forward.

Philip Hoare: Yeah, great. Okay. Just taking US civils first. I think we talked about our strategy previously in US civils, which is following the issues that we had in Texas, we did scale back our business to the point where we felt really comfortable about moving forward. We've secured three new wins over the course of the last 18, 24 months. All three of those projects are mobilizing really successfully. You would expect us, I think, to give extra diligence and put extra controls around that to give us that confidence. I've been to those projects myself, and I'm confident about our ability to be able to deliver them moving forward. I do think it's important, though, isn't it, to ensure that we can provide that confidence and that outcome before we race ahead and look to build greater depth in civil.

Speaker #5: And we've secured three new wins over the course of the last 18 to 24 months. All three of those projects are mobilizing really successfully, and you would expect us, I think, to give extra diligence and put extra controls around that to give us that confidence.

Speaker #5: I've been to those projects myself, and I'm confident about our ability to deliver them moving forward. I do think it's important, though, isn't it, to ensure that we can provide that confidence and that outcome before we race ahead and look to build greater depth in civils.

Speaker #5: So I would say we're making good progress. I'm confident about performance, and I'll keep a close and steady eye on that as we move forward.

Philip Hoare: I'd say making good progress, I'm confident on performance, but I'll keep a close and steady eye on that as we move forward. I think in terms of same thing, I guess that answers the 90/10 Nick's question as well. Just thinking about the investment portfolio. Look, we continue to see positive comment and traction in terms of what the UK PPP market looks like. We're actively engaged with the new Lower Thames Crossing Limited that's been established to set up that venture and that vehicle moving forward. We're in active discussion with UK government around both that portfolio, but also UK reservoirs program and other things that then may drop through from a PPP perspective.

Speaker #5: I think, in terms of the same thing, I guess that answers the 90/10 next question as well. Just thinking about the investment portfolio—so, look, we continue to see positive comment and traction in terms of what the UK PPP market looks like.

Speaker #5: So we're actively engaged with the new Lower Thames Crossing Limited that's been established to set up that venture and that vehicle moving forward. And we're in active discussion with UK government around both that portfolio, but also the UK Reservoirs Program and other things that then may drop through from a PPP perspective.

Speaker #5: So what I would say is that there is some traction, but still some time to go, I think, before we see that being actively realized. But Balfour Beatty is at the heart of the discussion.

Philip Hoare: What I would say is some traction, still some time to go, I think, before we see that being actively realized, but Balfour Beatty is at the heart of the discussion.

Speaker #4: Thank you.

Graham Hunt: Thank you.

Speaker #6: Good morning. Joe Brent from PAMU Librum. A couple of questions for me. Firstly, could you sort of highlight the three biggest pipeline items that you're most excited about for the group?

Joe Brent: Good morning. Joe Brent from Panmure Gordon. A couple of questions from me. Firstly, could you highlight the three biggest pipeline items that you're most excited about for the group? Secondly, just following up on the negative working capital points, I think you're guiding to average cash being flat in the H2. Does that suggest that you get lower negative working capital in the year rather than in the medium term? Finally, can you just give some indication of the size of the Texas loss in the H1?

Speaker #6: Secondly, just following up on the negative working capital point, I think you're guiding to average cash being flat in the second half. Does that suggest that you get lower negative working capital in the year, rather than in the medium term?

Speaker #6: And then finally, can you just give some indication of the size of the Texas loss in the first half?

Speaker #5: Thank you. Take the second, too. I'll take the first one. So, I guess just in terms of the three biggest pipeline opportunities that I'm excited about— I mean, to be honest, I'm excited about our whole pipeline, because I think there are some tremendous projects that sit within it.

Philip Hoare: If you take the second two, I'll take the first one.

Joe Brent: Okay.

Myles Westcott: Okay.

Philip Hoare: I guess just in terms of the three biggest pipeline opportunities that I'm excited about, I mean, to be honest, I'm excited about our whole pipeline because I think there's some tremendous projects that sit within it. We talked a moment ago about PPP in the UK, but Lower Thames Crossing we've made a meaningful start working with our customer to begin to deliver that program, and I'm looking forward to that getting into full scale delivery, which will obviously happen soon. The conversions are GBP 6 to 8 billion. We're working really closely with SSE to bring those projects into that construction phase, and alongside that, the opportunities of National Grid. When I turn to the US, we've got some really good long-term relationships with customers, particularly in the entertainment sector around Disney and Universal.

Speaker #5: So, we talked a moment ago about PPP in the UK, but at Lower Thames Crossing we've made a meaningful start, working with our customer to begin to deliver that program.

Speaker #5: And I'm looking forward to that getting into full-scale delivery, which will obviously happen soon. The conversion of the £6 to £8 billion we're working on—really working really closely with SSE to bring those projects into that construction phase—and alongside that, the opportunities of National Grid.

Philip Hoare: The conversions are GBP 6 to 8 billion. We're working really closely with SSE to bring those projects into that construction phase, and alongside that, the opportunities of National Grid. When I turn to the US, we've got some really good long-term relationships with customers, particularly in the entertainment sector around Disney and Universal. There are some really exciting opportunities coming up in that space too, which will draw on our 35-year track record of working with those customers. So something hopefully we can all enjoy in the future.

Speaker #5: And then, when I turn to the US, we've got some really good long-term relationships with customers, particularly in the entertainment sector, around Disney and Universal.

Speaker #5: And there's some really exciting opportunities coming up in that space too, which will draw on our 35-year track record of working with those customers.

Philip Hoare: There are some really exciting opportunities coming up in that space too, which will draw on our 35-year track record of working with those customers. So something hopefully we can all enjoy in the future.

Speaker #5: So, hopefully, that's something we can all enjoy in the future. Yep. On working capital, we expect to stick around the £1.6 billion average. Now, to do that sort of 19% negative working capital, we do pro rata the year's turnover.

Myles Westcott: Okay. Yep. On working capital, we expect to stick around the GBP 1.6 billion average. To do that sort of 19% negative working capital, we do sort of pro rata the year's turnover. I do not know whether that will mean it will decrease. That 15% to 18% is the long-term expectation. For this year, if it is 17% to 19%, that is what you could imply from holding the average cash. We do pro rata it to do the calculation. Texas loss in the H1, far reduced from last year. You will understand, I am not going to give you a specific number. We are very pleased with the overall performance of the US construction sector, and we do expect that margin to pick up a little in the H2 as that drag on profitability falls away.

Speaker #5: So, I don't know whether that will mean it'll decrease. But yeah, that 15% to 18% is the long-term expectation for this year. If it's 17% to 19%, yeah, that's what you could imply from holding the average cash.

Speaker #5: But we do pro-rate it to do the calculation. Texas loss in the first half, far reduced from last year. You'll understand I'm not going to give you a specific number.

Speaker #5: But we're very pleased with the overall performance of the US construction sector, and we do expect that margin to pick up a little in the second half as that drag on profitability falls away.

Speaker #6: Thank you very much.

Philip Hoare: Thanks very much.

Joe Brent: Thanks very much.

Speaker #1: OK. I think.

[Company Representative] (Balfour Beatty): Okay. I think we are finished in the room. We have two analysts on the iPad, so I am going to read them through. Alexander Craeymeersch at Kepler Cheuvreux. Three questions. You mentioned there are several end markets where momentum is accelerating. Your PFO is up close to 55%. Does that make low double-digit growth for 2026 a bit conservative? Considering the order book does not seem to be accelerating as fast as revenue, do you see the pipeline running ahead of that order book? How much do you expect to convert into orders in the H2? On Evolve, Energize, and Explore, you mentioned your investment in Pi Labs, a VC focused on build environment technology. What type of technology are we looking at here?

Speaker #6: I think we're finished in the room, so actually we have two analysts on the iPads. I want you to read them through. So, Alexander Kramersher, Kepler Cheuvreux.

Speaker #6: Three questions. You mentioned there are several markets where momentum is accelerating. Your PFO is up close to 55%. Does that make low double-digit growth for 2026 a bit conservative?

Speaker #6: Considering the order book doesn't seem to be accelerating as fast as revenue, do you see the pipeline running ahead of that order book? And how much do you expect to convert into orders in the second half?

Speaker #6: And then on Evolve, Energise, and Explore, you mentioned your investment in Pylabs—a VC focused on built environment technology. What type of technology are we looking at here?

Speaker #5: OK.

Myles Westcott: Okay.

Philip Hoare: Okay. Do you want me to do that?

Speaker #6: OK. Do you want to go there?

Philip Hoare: Do you want me to do that?

Myles Westcott: Yeah. Those 40% and 50% earnings growth numbers need to be taken into the context of that significantly reduced loss in US civils, which took that US construction, I think it was over GBP 30 million swing from H1 last year to this year. Once you strip that out and normalize it, you can see why low double-digit growth is the right place for us to guide, which is slightly ahead of the guidance we provided in March.

Speaker #5: Yeah. Look, those 40% and 50% earnings growth numbers need to be taken in the context of that significantly reduced loss in US civils, which took that US construction—I think as an over $30 million swing from the first half of last year to this year.

Speaker #5: Once you strip that out and normalize it, you can see why low double-digit growth is the right place for us to guide. Which is, yes, it's slightly ahead of the guidance we provided in March.

Speaker #5: Just taking a question on pipeline first. So, look, I believe we've got really strong momentum when we look ahead at our pipeline. And so, when you look at the order book, which is more than two times our annual revenues...

Philip Hoare: Just taking the question on pipeline first. Look, I believe we have got really strong momentum when we look ahead at our pipeline. When you look at order book, which is more than two times our annual revenues. As we look forward in terms of that future pipeline of opportunity, we have got a number of projects in that phase where they have been awarded but not yet contracted. As Myles said earlier, we expect the power elements of that to transmit into our order book over the course of the next 18 months or so. I talked about data centers, $1 billion there awarded but not contracted. Things like the publication of the Defence Investment Plan, we saw an immediate momentum swing in terms of new opportunities coming to the market as a consequence.

Speaker #5: And as we look forward, in terms of that future pipeline of opportunity, we've got a number of projects in that phase where they've been awarded but not yet contracted.

Speaker #5: And as Miles said earlier, we expect the power elements of that to transmit into our order book over the course of the next 18 months or so.

Speaker #5: But also, I talked about data centers—a billion dollars there, awarded but not contracted. And things like the publication of the Defense Investment Plan: we saw an immediate momentum swing in terms of new opportunities coming to the market as a consequence.

Speaker #5: We were anticipating them, but actually, the process started to flow as soon as that plan had been published. So I think there's really good momentum in terms of the pipeline.

Philip Hoare: We were anticipating them, but actually the process started to flow as soon as that plan had been published. I think really good momentum in terms of the pipeline. In terms of the three E's, Pi Labs, as you said, an investment fund focused on between 10 and 20 organizations that are bringing new technology into our space. That ranges from direct frontline productivity improvements in terms of recording and capturing data, to thinking about how new technologies will be used across the broad spectrum of what we do. I think some really exciting developments there, and look forward to sharing more of that in the future.

Speaker #5: Then, in terms of the 3Es—so Pylabs, as you said, is an investment fund focused on between 10 and 20 organizations that are bringing new technology into our space. That ranges from direct frontline productivity improvements, in terms of recording and capturing data.

Speaker #5: And to thinking about how new technologies will be used across the broad spectrum of what we do. So I think there are some really exciting developments there, and I look forward to sharing more of that in the future.

Speaker #6: OK, thank you. And then from Dan Cowen at BNP Paribas: you've talked about exploring market adjacencies in the UK and the US. Can you add a bit more color?

[Company Representative] (Balfour Beatty): Okay. Thank you. From Dan Cowan at BNP Paribas. You have talked about exploring market adjacencies in the UK and the US. Can you add a bit more color, any particular areas you are looking at. He goes on to say, would you be looking to acquire existing players or expand organic capability, which we have touched on.

Speaker #6: Any particular areas you're looking at? He goes on to say, would you be looking to acquire existing players or expand organic capability, which we've touched on?

Speaker #5: Yeah. OK. So, I mean, as I said, our first priority is organic growth. I think we've got significant opportunity to do that. I know everyone loves me, wants me to ask the question about M&A.

Philip Hoare: Yeah. Okay. As I said, our first priority is organic growth. I think we've got significant opportunity to do that. I know everyone wants me to answer the question about M&A. Look, organic growth, our number one priority. I think as we move forward, we would look at bolt-on M&A where it enhances our capability or our ability to enter an adjacent market. But we are right at the early stages of that. Miles and I will look forward to talking to you more about it in the future.

Speaker #5: So, look, organic growth is our number one priority. I think, as we move forward, we would look at bolt-on M&A where it enhances our capability or our ability to enter an adjacent market.

Speaker #5: But we are right at the early stages of that, and Miles and I will look forward to talking to you more about it in the future.

Speaker #6: Super. OK. Thank you. So that's all the questions on the iPads, so I'll hand over to Alex, the operator, to see if there are any calls on the phone line.

[Company Representative] (Balfour Beatty): Super. Okay, thank you. That's all the questions on the iPad. I'll hand over to Alex, the Operator, to see if there's any calls on the phone line.

Speaker #4: Thank you. At this time, there are no questions on the Confluence call, so I'll hand it back to the room.

Operator: Thank you. At this time, there are no questions on the conference call, so I'll hand it back to the room. Okay, great. Well, look, thank you very much for joining us here in the room and online as well. We really appreciate you spending some time with us. What I hope we've left you with is a sense of real momentum in Balfour Beatty. Strong H1 performance, slightly upgraded guidance for the remainder of the year, but importantly, great momentum and a powerful platform for growth into the future. Again, thank you very much for being with us, and we'll see you next time.

Speaker #5: OK, great. Well, look, thank you very much for joining us here in the room and online as well. We really appreciate you spending some time with us.

Speaker #5: What I hope we've left you with is a sense of real momentum in Balfour Beatty's strong first half-year performance, and slightly upgraded guidance for the remainder of the year.

Speaker #5: But, and really importantly, great momentum and a powerful platform for growth into the future. So again, thank you very much for being with us.