Shares in Balfour Beatty opened over 20 per cent down after the company issued a warning on its profits.
The UK's biggest construction group saw stakes fall by 22.63 per cent when it opened on Monday (September 29th) morning. It represented its fifth profit warning since 2012 and comes after the company decided against a £3 billion merger with rival Carillion. Alongside its profits warning, Balfour also stated that executive chairman Steve Marshall would be standing down but only when a new chief executive was found.
Balfour announced that there will be a further shortfall in its construction services division with the company expecting a drop of £75 million in the coming period. Accountants KPMG has been appointed to review the construction group's portfolio.
The construction group is now looking to recoup a significant windfall by selling US-based design consultancy Parsons Brinkerhoff. This is expected to be issued in October and Balfour anticipates the sale will generate £200 million, which will be returned to shareholders in the form of a share buyback programme.
It add that the transaction would be "subject to the board's assessment of the trading environment at the time".
Mr Marshall said: "This latest trading statement is extremely disappointing; the board has appointed KPMG to undertake a thorough review across the contract portfolio within Construction Services UK.
"There has been inconsistent operational delivery across some parts of the UK construction business and that is unacceptable. Restoring consistency will take time and it has our full focus."
Balfour's latest trading update comes after the company was selected by Magnox to deliver the £34 million Solid Intermediate Level Waste Encapsulation (SILWE) contract at Hunterston. The former nuclear power station in North Ayrshire will be subject to Magnox's continued goal of safely storing level waste and decommissioning these facilities.
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