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TWST: In order to start off our discussion, would you mind giving us a brief overview of Balfour Beatty (BBY.L), its different business segments and its markets?

Mr. Welton: We’re currently a company that turns over sales of about £3.5 billion sterling, which is something over 5 billion. We’re divided into four different disciplines that we believe are areas that we understand very well. Three of those disciplines or market sectors are markets where we actually do things, and one is where we invest. The three areas that we operate in are: firstly, everything to do with buildings, right through from the conceptual design of the building at its beginning, the construction of it, the control of that building, the building services within it, and the long-term maintenance. So we believe that we understand everything to do with buildings. Secondly, big infrastructure, and that could be civil engineering, roads, tunnels, dams; it could be power lines. It could be anything to do with heavy infrastructure. Thirdly, we are in rail. We are the biggest rail infrastructure company in the world and we do everything in rail effectively that doesn’t move, and that is track, electrification. We’re a manufacturer: we design, we build, we renew, and we maintain over long periods of time. The fourth discipline is that of investment in infrastructure; primarily, in fact, solely at the moment, in the UK, and very much orientated toward the UK government’s private finance initiative. That business invests in infrastructure and by doing so provides downstream work for one or more of our other business segments. The industry in the UK has very much moved in this sort of direction. A number of players in the UK industry have disappeared over the last ten years and we believe that the fact that we are prepared and strong enough to invest, and we’re very strong in the market sectors that we operate in, gives us a strong competitive advantage. We operate elsewhere in the world only where we believe that we can compete on at least equal terms with the players that are local to the particular country, and that we do on a selective basis. About 30 percent of our work is outside the UK, and our biggest market other than the UK is the US.

TWST: Could you elaborate on your strategy to gain a competitive advantage over these companies?

Mr. Welton: What we try to do is to focus our business on things we understand well. We have a sort of a mantra that we live by in the company, which is to do things that are sustainable, to focus on the areas that we know well, obviously to grow our profits, particularly by growing our profit margins rather than just by growth of the size of the business, and to improve our business processes. We do that, as I said, by focusing on the things we understand, and the skills that we have in those defined sectors that I pointed out in the beginning. We believe, by concentrating on that, where we have high engineering skills in those sectors, we can perform as well as anybody in the world, and that, we believe, is our particular skill.

TWST: Five years down the road, where do you see your company?

Mr. Welton: We would like to be as diverse in the US as we are in the UK because I believe we can offer customers more complex services in the UK than we can in the US at the moment. We would like to perhaps infill some of our business in the US so that we are a comprehensive supplier in the sectors that we understand. That’s something that we would like to be. We’d like to be well-established as an owner of assets and show that we can run those asserts in a profitable and responsible way, and that would be infrastructure and buildings, and to do that in whatever places in the world governments want us to do it, and I think they are the key issues for us.