Balfour Beatty heading for the rocks:

Balfour Beatty issues another profit warning

 UK engineering group Balfour Beatty has issued another profit warning, saying its 2015 results will be hit by a “shortfall” of £120m-£150m.

It said a review of its businesses had continued to “identify legacy issues” in the UK, US and Middle East which would hit profits.

The UK accounted for about two-thirds of the shortfall, it added.

The setback is likely to push Balfour into a loss in 2015, as analysts had been forecasting profits of £77m.

Balfour has issued several profit warnings in the past two years.

Shares in the engineering group fell 4.3% to 218.8p in early trade.

Last year, the company faced down a £2bn takeover bid from rival Carillion.

Balfour posted a loss of £59m for 2014 and said it would not be paying an annual dividend to shareholders.

That compared with a pre-tax profit of £185m in 2013.

Had the group not successfully sold its US construction business, Parsons Brinckerhoff, losses for 2014 would have amounted to £304m.

Balfour sold the business for £753m in October last year making a profit on the sale of £234m.

The sale of the US construction business was a major sticking point in the takeover negotiations with Carillion, which had wanted to keep the unit as part of its takeover offer.

Balfour’s chief executive, Leo Quinn said: “The issues we are working through are as I set out in March and legacy challenges remain.

“However, we are making encouraging progress on the group’s transformation. The positive response of our people to change, the continuing confidence of our customers in Balfour Beatty’s expertise and the first signs of improving cash performance reinforce my conviction in the group’s long-term success.”

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