Construction company Balfour Beatty has announced a significant loss for the past financial year.
The UK firm stated that it had seen a drop of £59 million during 2014 prompting a decision not to pay an annual dividend to shareholders. Balfour's latest trading update is in stark contrast to the pre-tax profit of £185 million the company posted a year earlier. It stated that UK construction losses include a further £118 million write-down following an assessment of the existing risk provision by the Board.
It has been a testing year for one of the biggest names in the UK construction sector. Balfour has issued four profit warnings in the past 12 months alone and the final losses were offset by its decision to sell its US construction business, Parson Brinckerhoff. Had this transaction not been completed then Balfour would have been looking at losses of around £304 million.
Leo Quinn, group chief executive, explained that the company will now by working through the "severe legacy of 'problem' construction projects". This is aimed at identifying what needs to be done to improve the current situation the company finds itself in.
"I remain convinced that all our operations can achieve industry-standard performance as markets improve. The real prize is a sustainable return to profitable growth, built on the Group’s unique capabilities, underpinned by leaner, stronger processes and flawless execution," Mr Quinn added.
Mixed share price results
Balfour has experienced mixed fortunes in terms of its share price in recent months. After announcing its latest profit warning in September, shares tumbled by 15.3 per cent. This latest trading update has seemingly had a reversal of fortunes.
Following the announcement, Balfour's share price rebounded up 5.62 per cent as 09:09 GMT on Wednesday (March 25th). It provides a slight boost in optimism for the company going forward.
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