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Construction: Balfour CEO steps down as firm warns on profits

May 7, 2014

The infrastructure group Balfour Beatty said yesterday its chief executive, Andrew McNaughton, had quit as it issued its third profit warning in 18 months.

The company said the weakness came from its British construction business, where it expects a pounds 30m shortfall in 2014. As a result, overall pre-tax profits for 2014 are expected to be in the range of pounds 145m to pounds 160m, rather than the expected pounds 188m.

Balfour Beatty said it had experienced significant operational issues in its mechanical and electrical engineering businesses and delays in some of its major building projects.

It said that, along with the tough market climate, it had lost out on contracts to competitors due to "poor operational delivery issues". Last October Carillion picked up a contract worth pounds 800m to build Airport City in Manchester, and another in November for pounds 180m to build roads in the UK.

"This is about poor management and failure to implement a good strategy over many years at Balfour Beatty and not the markets in which it and others operate," said Whitman Howard analyst Stephen Rawlinson. "Our concern is that there is more bad news to come." Agencies

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Source: Guardian (UK)

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