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

I'm joined today by Myles Westcott, our new CFO, who's been with us just a few months, but is already having an incredible impact on our business. I know we'll all look forward to hearing from Myles a little bit later as he gives us the detail of the results announcement.

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.

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. I wanted to start with a huge thank you to all of our Balfour Beatty colleagues, and so 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's down to you that I'm able to stand here today and talk about our company and the future.

Thank you. Now let's get into the first half year results.

Look, I am really pleased with our first half performance. We've delivered profitable growth and strong cash performance across the business.

As I talked about last March, we anticipated the conclusion of the US monitorship, and that happened as planned on the 6th of June. 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.

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. 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.

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

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.

I'm really pleased with 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. 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. 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 first half of the year. I just wanted to share some of the highlights of that with you.

Firstly, within UK power transmission, momentum continues to build, and 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 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. So 24% growth in revenue year on year.

Our order book now stands at £2.1 billion, that's up from £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 £6 to £8 billion.

If you remember before, I've 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've seen that now begin to move.

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. We've also been awarded a new substation on top of the work we were already doing at Bramford to Twinstead for National Grid.

We're doing the overhead lines, 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. Look, I think really positive momentum underpinned by the further wins that we've had in this growth market.

Turning now to UK defense, look, we are really well differentiated in this space, and I'll outline some of that in a moment. The key thing that's happened in the first half of this year is the publication of something called the Defense Investment Plan.

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.

You can see the percentages increase in spending there that happens, and 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. Then 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, 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. 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.

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.

Procurement reform that supports that I think is incredibly important. Now 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. 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.

Then finally, having a robust balance sheet, a strong relationship with 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. 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. Look, it's been a great start to the year for US construction.

Our revenue is up 19% on the half year 2025, and we've 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. 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 now started delivering work for them in each of the geographic areas that we operate in. Really simple: a customer we know well doing work across the US, we're now working with them across the US.

In particular, I wanted to highlight the aviation and data center markets. 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. 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. 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.

Data centers, 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.

We've been working with key clients for over 20 years delivering data centers. 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 US.

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, and we've secured a further billion dollars worth of work that's been awarded but not yet contracted that we're in the process of moving through into our order book. I see significant momentum occurring in that market overall.

What I wanted to do there is 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. What I'm going to do now is hand over to Myles and let him take you through the details of the financials.

Thanks very much, Philip. Good morning, everyone.

I'm delighted to be here at such an exciting time for Balfour Beatty. Since joining in May, I've spent much of my time getting to know the business, meeting colleagues from across the group.

Even in the short time I've been in role, 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. Whilst I will, of course, bring a fresh perspective, I've joined a 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, which leads me nicely on to the financials and the strong first half results which I'll now take you through. Headline numbers: revenue grew by 8% to £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 £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, 12% increase.

The order book increased slightly in the period to £22.9 billion, and the directors' valuation of the infrastructure portfolio remained at around £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 £1.7 billion, and average net cash for the period was £1.6 billion. Overall, 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. Operational performance in UK Construction was strong in the first half, delivering PFO margin of 3.4%.

This represents improvement of 50 basis points after you exclude the one-off insurance recovery booked in the first half of last year. 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 £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 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.

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.

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 the first and second half profit this year. To the order book, which we've maintained at around £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'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. The US is slightly down, mainly due to Civils, where we're 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 £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, 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 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 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.

We also disposed of two US assets in the first half, both of which were completed at or above the directors' valuation. 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.

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.

After those movements, the directors' valuation of the portfolio is maintained at around £1.1 billion. Looking at cash now, another area where performance has been strong throughout the first half, with 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 color. 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.

Moving to working capital, as 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 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 made a £30 million contribution, with no further contributions expected.

Finally, the share buyback program is progressing well. We're on track to complete the full £200 million by the year-end.

Finally, turning to outlook for the full year, where we've updated our guidance in three areas. 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.

No change in our guidance for Infrastructure Investments. For net finance income, given the strong cash position, we're increasing our guidance to a range of £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 first half, we're upgrading the guidance for average net cash to a range of £1.5 to £1.7 billion.

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. With that, I'll hand you back to Philip.

Thank you, Myles. Obviously, we're pleased with that first half 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're operating in: UK energy, UK defense, UK transport, and US buildings; and then the new profitable growth framework that we've put in place under Evolve, Energize, 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.

The ability to bring design and engineering through project management into construction management, on into construction, and then on to 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.

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. 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.

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, Energize, 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 organization.

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. 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.

Turning to Energize, this is all about accelerating profitable growth. We've picked a number of key areas there.

Firstly, for me, this is about really being close to our customers, understanding their demands, making sure that we're agile enough to be able to respond to that. 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, and then accelerating growth in those UK growth markets that we've indicated. Then finally, Explore is about shaping what's next.

It's about scanning that horizon, it's thinking about technology and adjacencies that will enable us to grow faster and stronger as an organization. Of course, you've got to measure all this, don't you?

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.

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's 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. We've made real momentum on this program in the first half of the year.

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'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 organization, 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. I've 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're operating in.

Then finally, and 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, we're 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. On Energize, 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's really thinking about how we get laser-focused on our customers. 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.

Then finally on Explore, the shaping what's next, we've made an investment of £10 million in Pi Labs. This is all about connecting new technology that's going to help us drive productivity and efficiency at the frontline on the projects we serve.

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've 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're making great momentum. Evolve, Energize, and Explore has landed well and truly in our organization.

It's 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 first half momentum we have in the business and the slightly upgraded guidance that we've given for the second half of the year. 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'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. 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.

Then finally, under Evolve, Energize, and Explore, we really do have fantastic momentum into the future. 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.

Thank you very much. Myles and I now look forward to your questions.

Philip, Philip. Right, we're going to start in the room.

We do actually have some questions on the iPad as well,

we'll

do room, iPad, and then we'll go to the phones. I'd ask to put your hand up and wait for the mic to get to you, and then we'll get going.

Thank you.

Thanks. Aynsley Lambert from Investec.

Just two for me, please. When we look at the kind of Support Services 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 assets quite a big chunk of 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?

Certainly. Perhaps if I take the monitorship question first, and come back to you on Support Services.

Just in terms of the monitorship, look, ultimately, our main goal firstly was to end the monitorship, and 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.

Our focus remains on delivering a great service for the American servicemen and women that live in those properties. That's our immediate focus.

On the Support Services margin, look, we're delighted with the strong start to the year. 9.1% is an excellent performance, which was actually margin increase in both the power and the transportation divisions within Support Services.

Going forward, yeah, I think, yeah, the momentum we've got will continue. Whether we'll stay at 9.1% by the full year, I'm not so sure, but we'll get close to 9%.

Thanks. Jonny Coubrough from Deutsche Numis.

Could 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?

Certainly. 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.

We really welcome the model and, I guess progressing with our clients on that.

Thanks very much. Also on US Civils, I think you said, Myles, that it delivered a much reduced loss in the first half, still loss-making.

Can we take it that Buildings is doing a 2% management fee margin on a run-rate basis?

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. You'll recall the Texas highway project's 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 pick up in that margin as we approach the full year. US Buildings, yeah, we've talked about it before, 1.5% to 2% is where it should end up.

Thanks very much. Last one from me is just on the 3Es 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?

Yeah. Look, our absolute focus is on organic growth.

I think you've seen the momentum that we believe we can see in those markets and those chosen growth markets moving forward, so that's our priority.

Hi, Rob Tansey, 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? 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?

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?

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, 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—so, 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. I think the key thing about our US business is the ability to remain agile, and so, if I look back at our order book, 5 years ago, we were a double-digit and strongly double digits on commercial and residential, and we're not because the market changed.

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. 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.

Then finally, I think just the 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. 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.

Good morning. Andrew Nussey from Peel Hunt.

A couple of questions as well, please. When we look at working capital as a percentage of revenue, increased to sort of 19% or negative 19% versus negative 17%, which still seems significantly higher than sort of the long-run average.

You gave us a feel for the drivers behind that, but those drivers don't look like they're going to change anytime soon. 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 are there any sort of one-offs in there that might impact the margin next year and going forward?

Thanks very much. Look, firstly, working capital: as you say, very strong performance, round about 19% of revenue.

We've talked in the past about 15% to 18% being the sort of level we'd settle at. I think that's still the case.

That's why we're holding our average cash, i.e. increasing our guidance, our average cash is round about £1.6 billion by the year-end.

You're also aware these are mobilization payments on our contracts. If the style of contract continues and the growth continues, then, yeah, we are going to continue at that sort of 15% to 18% negative working capital, but that cash is needed to deliver the programs.

We will, whilst we may see some further inflows given the growth that Philip set out, there'll also be outflows to deliver the programs. Sorry, the second question?

The second question is about the drop-through.

Thank you. That's on Support Services.

Look, it was a great first half. 9.1% was great performance by the teams.

In the second half, we have got some of these early start contracts, we will see a increase in PFO in the second half, but I just wouldn't say that 9.1% is the new normal yet.

Were there any one-offs in—

No. Just good performance.

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 Buildings, 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 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. 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.

Great. Okay.

Just taking US Civils first: so, I think we've 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, and 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 Civils. I would 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 the same thing, I guess that answers the 90/10 mix 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.

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 UK reservoirs program and other things that then may drop through from a PPP perspective. 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.

Thank you.

Good morning. Joe Brent from Panmure Liberum.

A couple of questions from me. Firstly, could you sort of highlight the three biggest pipeline items that you're most excited about for the group?

Secondly, just following up on the negative working capital point: I think your guidance 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? Then finally, can you just give some indication of the size of the Texas loss in the first half?

Can you take the second two? I'll take the first one.

Yeah.

I guess just in terms of the three biggest pipeline opportunities that I'm excited about, 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 conversion of the £6 to £8 billion, we're working really closely with SSE to bring those projects into that construction phase, and alongside that, the opportunities with National Grid. 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, 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.

Something hopefully we can all enjoy in the future.

Yeah.

On working capital, yeah, we expect to stick around the £1.6 billion average. Now to do that sort of 19% negative working capital, we do sort of pro rata the year's turnover, I don't know whether that will mean a decrease, but, yeah, that 15% to 18% is the long-term expectation.

For this year, if it's 17% to 19%, yeah, what you could imply from holding the average cash, but we do pro rata 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, but we're, yeah, 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.

Thanks very much.

I think we're finished in the room. We actually have two analysts on the iPad, I'm just going to read them through.

Alexandre Crema-Mercher at Kepler Cheuvreux: three questions. "You mention 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?

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? On Evolve, Energize, and Explore, you mentioned your investment in Pi Labs, a VC focused on built environment technology.

What type of technology are we looking at here?"

Yeah. Look, those 40% and 50% earnings growth numbers need to be taken into the context of that significantly reduced loss in in US Civils, which took that US Construction I think it was a over £30 million swing from first half last year to this year.

Once you strip that out and normalize it, you can see why, yeah, low double-digit growth is the right place for us to for us to guide, which is slightly ahead of the guidance we provided in March.

Just taking their question on pipeline first: so, look, I believe we've 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, but, 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.

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. Also, I talked about data centers, a billion dollars there awarded but not contracted.

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. 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. Then in terms of the 3Es, Pi Labs, as you said, an investment fund focused on between 10 and 20 organizations that are bringing new technology into our space at ranges from direct front-line productivity improvements in terms of recording and capturing data, and to thinking about how new technologies will be used across the broad spectrum of what we do.

I think some really exciting developments then look forward to sharing more of that in the future.

Thank you. Then from Dan Cowan at BNP Paribas: "You've talked about exploring market adjacencies in the UK and the US.

Can you add a bit more color, 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?"

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 ask the question about M&A, 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, but we are right at the early stages of that. Myles and I will look forward to talking to you more about it in the future.

Super. 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.

Great. 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 first half year performance, slightly upgraded guidance for the remainder of the year, but really 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.