Balfour Beatty, who has continuously faced struggles over the past two years, has issued a new £150m profit warning for this year. This is largely on account of problematic contracts internationally, mainly the Middle East, the United States and Britain.
New CEO Leo Quinn, who has brought in to help to revive the company, has said it had “continued to identify legacy issues” which now means the company will face a 2015 pre-tax profit reduction of £120m to £150m.
With the most recent market consensus for the firms pre-tax profit at £77m prior to this warning, it looks certain that Balfour will remain in the negatives for the end of this financial year. Shares in the group have already fallen 10 percent and were down 2.8 percent earlier today.
Westhouse analyst Alastair Stewart has said: “based on the word ‘continuing’ we suspect more is to come from these three regions… it all looks very negative and could run and run.”
In response to the profit warning Balfour has recently cancelled their share buyback in addition to adjustment their pension fund payments in order to strengthen its balance sheet.
With over 36,000 people employed through Balfour, these warnings come as a severe worry to many. However Quinn has remained optimistic agreeing that “the issues we are working through as I set out in March and legacy challenges remain… however, we are making encouraging progress on the group’s transformation.”
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