Shares in Balfour Beatty (BBY) slumped 20 per cent after the international infrastructure group added to a string of profit warnings by admitting that pre-tax profits for the current year will be significantly lower than previous expectations. A £30m shortfall identified in the UK construction division means that group profits will be in the range of £145m to £160m, Balfour Beatty added. One of the major casualties is chief executive Andrew McNaughton who steps down with immediate effect, having only been appointed just over a year ago. He will be replaced by executive chairman Steve Marshall until a successor is appointed.
The group has already disposed of its UK facilities management business for £155m and put its rail operations in Spain and Scandinavia up for sale, and options identified in a strategic review now include the possible sale of professional services group Parsons Brinkerhoff, acquired in 2009 for £380m. The decline in profits is largely confined to the UK construction business where the group has experienced issues with poor operational delivery, as well as cost increases and delays.