Construction woes see Balfour Beatty share price dive 10%
Shares in the group fell sharply after the firm flagged “extremely tough” conditions in its UK construction operation and said group chief executive Andrew McNaughton would personally take charge of the arm.
Balfour Beatty, which employs around 1,500 staff at six sites in Scotland, said it was a “challenging environment in which to win and execute work” with market conditions deteriorating sharply in the second half of last year.
It said the UK construction business was expected to deliver “significantly lower profits” from operations this year than expected at the time of full-year results last month - representing a second profits warning in six months, with the last coming in November.
The firm recently landed a £130m Crossrail contract and has also been working on the major revamp of London’s Blackfriars station and the M25 road widening.
But in yesterday’s trading update it said customers had been imposing “increasingly stringent conditions” on contractors.
The company also said there had been “poor performance” in its UK regional construction business and to a lesser extent in its “major projects” arm.
Meanwhile a major restructuring, designed to streamline the business and cut costs to remain competitive, had also taken its toll.
It said trading in its other businesses around the world remained “broadly in line with expectations” and stressed that it retained a strong balance sheet.
Shares in the company closed down 23.5p, or 9.5 per cent, at 222.9p