Balfour Beatty
Website:
Balfour Beatty
Index:
FTSE 250
EPIC: BBY
Supersector:
Construction and Materials
Sector:
Construction and Materials
Subsector:
Heavy Construction
Market Cap:
£3.85B
Payout Frequency: Semi-Annual
Balfour Beatty Dividend Analysis and Summary
Key Dividend Details
- Final dividend: 9.8p per share (FY25)
- Interim dividend: 4.2p per share (FY25)
- Total FY25 dividend: 14.0p per share (up 12% YoY from 12.5p)
- Ex-dividend date: 14/05/2026
- Record date: 15/05/2026
- Payment date: 01/07/2026
- DRIP election deadline: 10/06/2026
- Dividend policy: ordinary dividend targeted at ~40% payout of underlying PAT excluding Investment disposals
- Implied FY25 payout vs underlying EPS (47.6p): ~29% (below 40% target; excluding Investment disposals would lift the effective ratio)
- Capital returns 2026: planned £200m buyback; total 2026 shareholder cash return (dividends + buybacks) ~£267m
Analysis: Sustainability and Growth
- Coverage and cash: Dividend (14.0p) is well covered by underlying EPS 47.6p (~3.4x) and supported by very strong liquidity (average net cash £1,212m; year-end net cash £1,446m). Operating cash conversion benefited from a sizeable working capital inflow in 2025, with 2026 average net cash guided to £1.3–1.5bn.
- Earnings trajectory: Board guides to high single-digit PFO growth in 2026 for earnings-based businesses, with improving UK Construction margins, Support Services margin >8%, and US Civils drag diminishing mid-2026. This underpins scope for ongoing dividend growth.
- Policy alignment: The 40% payout target (ex-Investment disposals) leaves headroom (FY25 payout ~29%), giving flexibility if Infrastructure Investment gains moderate in 2026 (guided £5–15m vs £36m in 2025).
- Capital allocation discipline: Continued multi-year buyback (£200m in 2026) alongside dividend increases signals confidence and supports per-share growth by reducing the share count.
- Multi-year visibility: Record £22.7bn order book (+23%) and strong exposure to UK energy/defence and US Buildings provide solid revenue and cash flow visibility to fund dividends.
Structural or Policy Developments Relevant to Dividends
- No share consolidation, demerger or major M&A flagged. One small business disposal (Omnicom Balfour Beatty) is non-structural.
- Pension update: Triennial agreed; one-off £30m payment made Feb 2026; from 2027, DB surplus is expected to offset DC contributions (cash-positive to the Group), modestly enhancing future dividend capacity.
- Buyback: Ongoing, with £200m planned for 2026, complementing the ordinary dividend within a consistent capital allocation framework.
Risks and Flags to Dividend Stability
- Building Safety Act (BSA): Additional £37m provision in 2025; exposure to further claims remains a watchpoint.
- US Civils project overruns: Cost/schedule issues on one Texas highways project persist until mid-2026; recoveries being pursued. Management expects improvement thereafter.
- Infrastructure Investments: Small pre-disposals loss expected in 2026 and lower disposal gains (£5–15m vs £36m in 2025). While gains are excluded from payout policy, lower proceeds could temper discretionary cash headroom.
- Regulatory/Compliance: US military housing monitorship extended to 06/06/2026; costs should abate post-completion but remain a near-term drag.
- Working capital normalization: 2025 benefitted from a large inflow; mix/timing could reverse. That said, guidance still points to higher average net cash in 2026.
Read more
Balfour Beatty Annual Dividend Yield - 1.62%
Dividends Used in Calculation:
| Ex-Dividend Date |
Payment Date |
Type |
Amount |
Currency |
| 15/05/2025 |
02/07/2025 |
Final |
8.70p |
GBX |
| 30/10/2025 |
05/12/2025 |
Interim |
4.20p |
GBX |
Total (Annual Dividends Per Share):
12.90p
Dividend Yield =
Annual Dividends Per Share (12.90p)
÷ Share Price (798.5p)
= 1.62%
Balfour Beatty Dividend History
| Ex Dividend Date |
Payment Date |
Type |
Amount |
Currency |
| 14/05/2026 |
01/07/2026 |
Final |
9.8000p |
GBX |
| 30/10/2025 |
05/12/2025 |
Interim |
4.20p |
GBX |
| 15/05/2025 |
02/07/2025 |
Final |
8.70p |
GBX |
| 31/10/2024 |
06/12/2024 |
Interim |
3.80p |
GBX |
| 16/05/2024 |
03/07/2024 |
Final |
8.00p |
GBX |
| 26/10/2023 |
05/12/2023 |
Interim |
3.50p |
GBX |
| 18/05/2023 |
05/07/2023 |
Final |
7.00p |
GBX |
| 27/10/2022 |
05/12/2022 |
Interim |
3.50p |
GBX |
| 26/05/2022 |
06/07/2022 |
Final |
6.00p |
GBX |
| 04/11/2021 |
06/12/2021 |
Interim |
3.00p |
GBX |
| 03/06/2021 |
07/07/2021 |
Final |
1.50p |
GBX |
| 21/05/2020 |
03/07/2020 |
Final |
4.30p |
GBX |
| 24/10/2019 |
06/12/2019 |
Interim |
2.10p |
GBX |
| 16/05/2019 |
05/07/2019 |
Final |
3.20p |
GBX |
| 04/10/2018 |
30/11/2018 |
Interim |
1.60p |
GBX |
| 19/04/2018 |
06/07/2018 |
Final |
2.40p |
GBX |
| 05/10/2017 |
01/12/2017 |
Interim |
1.20p |
GBX |
| 20/04/2017 |
07/07/2017 |
Final |
1.80p |
GBX |
| 06/10/2016 |
05/12/2016 |
Interim |
0.90p |
GBX |
| 09/10/2014 |
05/12/2014 |
Interim |
5.60p |
GBX |
| 23/04/2014 |
04/07/2014 |
Final |
8.50p |
GBX |
| 09/10/2013 |
06/12/2013 |
Interim |
5.60p |
GBX |
| Year |
Interim |
Final |
Currency |
Total |
Change |
| 2024 |
3.800 |
8.000 |
GBX |
11.800 |
12.380 |
| 2023 |
3.500 |
7.000 |
GBX |
10.500 |
10.520 |
| 2022 |
3.500 |
6.000 |
GBX |
9.500 |
111.110 |
| 2021 |
3.000 |
1.500 |
GBX |
4.500 |
4.650 |
| 2020 |
|
4.300 |
GBX |
4.300 |
-18.860 |
| 2019 |
2.100 |
3.200 |
GBX |
5.300 |
32.500 |
| 2018 |
1.600 |
2.400 |
GBX |
4.000 |
33.330 |
| 2017 |
1.200 |
1.800 |
GBX |
3.000 |
233.330 |
| 2016 |
0.900 |
|
GBX |
0.900 |
-93.610 |
| 2014 |
5.600 |
8.500 |
GBX |
14.100 |
151.780 |
| 2013 |
5.600 |
|
GBX |
5.600 |
|
Balfour Beatty Dividend Calculator
Balfour Beatty Dividend Growth
| Dividend Growth (1Y) |
12%
|
| Dividend CAGR (5Y) |
56.32%
|
| Years of Growth |
4
|
| Payout Ratio |
24.33%
|
| Buyback Yield |
4.36%
|
| Shareholder Yield |
6.12%
|
| P/E Ratio (TTM) | 15.29 |
|---|
| Forward P/E | 16.19 |
|---|
| P/FCF | 6.28 |
|---|
| Earnings Yield | 6.9% |
|---|
| FCF Yield | 15.91% |
|---|
| ROE | 23.14% |
|---|
| ROCE | 5.83% |
|---|
| Profit Margin | 2.77% |
|---|
| Operating Margin | 1.61% |
|---|
| Gross Margin | 4.81% |
|---|