Tunnel builder warns of tougher times ahead

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THE building firm responsible for the Hindhead Tunnel on the A3 has warned that it expects infrastructure markets to be tough for the next two years after government cutbacks in the UK and United States.

Lower levels of construction activity generally in the two countries will hit its short-term performance with revenues growth likely to be ‘constrained’, said Balfour Beatty.

The group, which also built the Aquatics Centre for the Olympics in east London, added that specialist projects such as these are becoming harder to find.

Balfour’s construction division posted flat revenues of £3.27bn in the half year to June, out of a group total up one per cent at £5.2bn.

Profits from construction also fell, by 15 per cent to £67m, but were offset by more than doubled profits from Balfour’s infrastructure investment arm after the sale of a stake in road building group Connect A50.

Underlying profits rose by four per cent to £138m, but pre-tax profits fell nine per cent to £91m after £47m of write-offs. Balfour said the impact of the UK’s spending review was evident in its order book.