Underlying pre-tax profits were down by a third to £187m (2012: £277m) with earnings per share by a similar proportion from 31.7p in 2012 to 20p.
Total revenue was up 2% to £10.12bn (2012: £9.97bn).
Discounting the discontinued businesses of Balfour Beatty Workplace and its mainland European rail operations, reported pre-tax profits were down 78% to £32m (2012: £147m).
The company said that the UK “remains an extremely competitive market with margins remaining under pressure despite volumes improving in the highways and rail sectors”.
At the start of the year Balfour Beatty’s UK construction operations were reorganised into three business units consisting of major projects, regional and M&E.
In April Nicholas Pollard was brought in as CEO of Construction Services UK and in the following months those regional delivery units with weak prospects were shut down.
An improved second-half performance was attributed to these actions, but problems clearly remain within the company:
“Whilst we have seen a better than anticipated turnaround in the regional business, there was weaker financial performance on selected major projects in the building sector,” the company said.
“In our mechanical and electrical engineering business, where we predominantly act as a subcontractor, financial performance in the final quarter was adversely impacted by increasingly difficult market conditions. The impact of these further deteriorations resulted in an overall £60m reduction in profitability versus expectations at the start of the year.”
Action has also been taken to reorganise the business in Australia where the downturn in the natural resources sector has had an impact.
Chief executive Andrew McNaughton said: “We are seeing increasing evidence of improving conditions in some parts of our core US and UK markets, although the long cycle nature of our business means that these will take time to feed through fully in our financial performance.”
He added: “Looking ahead there are signs that some of our core markets, such as private US building and parts of the UK construction market, are improving, albeit these will take time to feed through fully in terms of financial performance. It is here we will target our efforts and maximise the benefits from a recovery whilst being mindful of the risks of inflation and subcontractor defaults that may accompany it. The Infrastructure Investments business is critical to connecting our operating divisions and this will remain a key area of focus as we move forward. Over the longer term our objective is to grow our local presence in our existing core markets and develop the next generation of core markets where trends play to the group’s overall strengths.”
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