In a trading statement, Balfour said the deterioration amounts to a
The full-year pretax profit guidance remains the same as it gave when it put out a first quarter trading statement in early May.
"As previously highlighted we are on a 12-18 month programme to restore our
It said it identified the new profit shortfall in engineering services business as it was reviewing the projects in the business with a view to strengthening management control. It said that
"A number of factors have contributed to this further deterioration. These include design changes, project delays, rework on projects and contractual disputes on a number of projects," it said.
"Given these issues, we are reviewing the size and geographic footprint of the business with the aim of ensuring a smaller, more focussed business. In central
Balfour said that its
The market in
Its support services unit is trading in line with expectations, driven by highways services contracts and rail renewals activities. It is also doing well in the current framework competitions in the utilities sector, Balfour said.
Its infrastructure investments business is continuing with its PPP concession disposal programme, and has achieved gains of
"Given this very strong performance and the continuing favourable secondary market for infrastructure assets we are targeting further PPP disposals in the second half of 2014. Full year PPP disposal profits will be broadly in line with those achieved in the full-year 2013. Recognising the strength of the secondary market we are also intending to increase the directors' valuation at the half year," it said.
The company added that its professional services has also performed well and in line with its expectations. In May, it had announced it would evaluate options for the possible sale of Parsons Brinckerhoff. Thursday, it said a competitive sales process is now fully underway and "proceeding in accordance with the board's expectations".
Balfour said its overall order book remains broadly unchanged from
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