UK-based Balfour Beatty has issued another profit warning, saying that the UK accounted for approximately two thirds of the additional shortfall.
In January, the international infrastructure group announced a cut in forecast profits following a review of its UK construction business by accountants KPMG.
Now, it has provided an update ahead of its results for the six months ended 26 June, 2015, which will be announced on 12 August, 2015.
It said that its ongoing, in-depth review of group businesses had continued to identify legacy issues in the UK, US and Middle East which would result in an additional shortfall to 2015 pre-tax profit of £120 million (€166.63 million) to £150 million (€208.26 million).
Balfour Beatty said, however, that its Build to Last transformation programme was already gaining traction. New project disciplines and financial controls are being embedded, it said, with a new senior leadership team substantially in place, and it added that good progress was being made against the £100 million (€138.78 million) permanent cost reduction programme.
The company said, “As a result of the actions taken under the Build to Last programme, net cash is expected to exceed £200 million (€277.58 million) at the half year end – substantially better than the first half of 2014, demonstrating the group’s ability to maintain balance sheet strength through self-help.”
Leo Quinn took up the position of group chief executive in January of this year.
He said, “The issues we are working through are as I set out in March and legacy challenges remain. However, we are making encouraging progress on the group’s transformation.
“The positive response of our people to change, the continuing confidence of our customers in Balfour Beatty’s expertise and the first signs of improving cash performance reinforce my conviction in the group’s long-term success.”