(Reuters) - Balfour Beatty (LON:BALF) Plc restarted dividends after an 18-months hiatus and said it expected its business to reach industry-standard level margins over the following 24 months, showing promise of sustained growth after a turbulent few years.
The construction company said there were little signs as yet of Britain's vote to exit the European Union impacting its markets, but added that it was too soon to know how the decision would eventually play out.
"Given the late cycle nature of the construction industry it is too soon for clarity as to what, if any, direct impact the decision will have," Balfour said in a statement.
Balfour said it would pay out an interim dividend of 0.9 pence per share and that the interim-to-final dividend ratio would be approximately 1:2.
The British company's shares rose almost 8 percent to trade higher than their close on June 23, the last day before the results of the EU referendum were announced. Most analysts expect the construction sector to fare badly in the fallout from the Brexit vote.
Balfour said it anticipated a progressive dividend policy going forward, effectively indicating that its dividend should be expected to rise at least in line with increases in earnings.
The company posted a total pretax loss from continuing operations, before one-off items, of 21 million pounds for the six months ended July 1, compared with a loss of 150 million pounds a year earlier.
The company said strong performance in the United States was overshadowed by losses due to historic UK projects, although its turnaround initiatives meant a much smaller negative impact.
Balfour is reviewing all its businesses due to loss-making contracts in Britain, the Middle East and Asia, which had pushed it deep into the red.
As well as scrapping its dividend for 2015, the 107-year-old company had cancelled a share buyback and reorganised its pension fund payments to strengthen its balance sheet.
Along with a restart in shareholder payouts, Balfour said on Wednesday that it expected to make solid and measurable progress going forward and was on track to achieve its 2016 cash and cost targets.