Balfour Beatty to miss 2013 profit forecasts

Contractor Balfour Beatty has warned that a deteriorating outlook from its UK construction business will see profit from this unit fall 20% in 2013.

The company said 2013 profit from its UK construction business was expected to be £50 million (€59 million) lower than management had expected. It said it faced a challenging environment in the UK market, with conditions deteriorating significantly in the last six months of 2012 and continuing to be difficult.

Balfour Beatty chief executive Andrew Naughton will now take charge of the UK construction unit to address the issues.

But the company said trading in its other business areas was on track with 2013 expectations, including a £10 million (€12 million) deterioration from rail operations in Germany and some weakness in professional services in Australia. This has been offset by outperformance in investments and in professional services, specifically in US transportation, Asia and the Middle East.

The profit warning comes after Balfour Beatty reported a 7% year-on-year fall in underlying profit for 2012 to £309 million (€356 million), after growth in new markets failed to offset weakness in its UK and US construction business.

It also confirmed plans to sell off all of its mainland European rail businesses.