GB : Balfour Beatty - Cash + Investments > market cap

FY 21 FD EPS was 26% ahead of estimates, with higher disposal gains and higher margins at Support Services. There was a £34m exceptional on a legacy stone façade contract. We now increase our FY 22 and FY 23 FD EPS by 4% and 5% from before the results to reflect the buy-back. Inflation, shortages and in particular the three London contracts seem manageable within consensus. The buy-back for FY 22 was increased from £100m to £150m. But we leave our average net cash estimate for FY 22 at £580m. The order book was flat at the H1 21 level of £16.1bn, despite HS2 unwinding, and there is a strong pipeline. A CY 22 P/E of 9.5x is unusually cheap given the investment portfolio and low real yields in a historical context.