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Balfour Beatty plc Trading Update

The Group's trading performance in 2003 was in line with expectations, with good progress made in the second half of the year. Cash flow was again very satisfactory and year-end net cash exceeded the half-year position of £104 million after paying for the acquisition of Mansell.

Sectors

Trading in Building, Building Management and Services was in line with the previous year. A record order book and the acquisition of Mansell should result in growth in this sector in 2004. In Civil and Specialist Engineering and Services, performance has improved in 2003, although some recoveries anticipated during the year in the US are still awaiting final settlement. Rail Engineering and Services had a strong second half. We do not anticipate that 2004 performance will be materially impacted by Network Rail's decision to take maintenance in-house. Good progress was made in Investments and Developments with a first contribution from Metronet at the predicted levels. There continue to be significant active opportunities for Balfour Beatty in this sector, particularly in health and education.

Exceptional Items

There will be a number of exceptional items in the accounts for 2003, the net impact of which is likely to be an exceptional profit. These items include provision for anticipated costs arising from the termination of three Network Rail maintenance contracts and for some residual liabilities in respect of BICC's US cables business which was sold in 1999. Profits on the sale of certain operating assets will also be taken as exceptional.

Outlook

The Group's order book remains in excess of £6 billion, up from £5.1 billion at the end of 2002. Prospects continue to be encouraging.

ENDS

Enquiries to:
Tim Sharp
Tel: 020 7216 6884
www.balfourbeatty.com