The shares of Balfour Beatty plc (LSE: BBY) were flat at 250p this morning after the FTSE 250 mid-cap revealed it had been appointed the preferred bidder for a large student accommodation contract in Florida.
Balfour Beatty, the global construction firm, is set to develop a sprawling range of facilities for the University of West Florida in a deal worth £330m. The project’s amenities will range from a football stadium to accommodation for students and retired faculty members.
The development will take around 10 years to complete, with the first phase due to finish in 2014.
Commenting on the deal, Balfour’s chief executive Andrew McNaughton added:
“We have identified the student accommodation market as a key growth area and an effective route to the diversification of our business… Our progress so far demonstrates that we are well-placed to maximise on these opportunities as they come to market.”
With a market cap of £1.7bn, Balfour Beatty’s shares trade at 10 times expected earnings, and offer an impressive prospective dividend yield of 5.6%.
Of course, whether that valuation, today’s announcement and the future prospects for the construction industry all combine to make shares of Balfour Beatty a ‘buy’ remains your decision.
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> Mark does not own any share mentioned in this article.
