Balfour Beatty’s £61.5m sale of its stake in Pinderfields and Pontefract Hospital will not be enough to buoy shareholder confidence following the firm’s profit warning on Monday, analysts have said.
The company disposed of its 50 per cent interest in the public-private partnership (PPP) yesterday, selling to an HCIL subsidiary, and also announced three new contract wins, however the share price fell almost four per cent.
Olivia Peters, analyst at RBC Capital Markets, told City A.M: “Balfour Beatty’s problems run much deeper than the odd contract win here or the odd PPP disposal there. There has been a systematic failure when it comes to assessing risk in the UK construction projects and when it comes to pricing them.”
Peters said the declining share price reflected a “lack of visibility” at the group, adding: “People have no confidence in the running of the business because there’s little leadership, with no CEO and the chairman stepping down.” She said that share price would go up if a new CEO was appointed and KPMG, which had been brought in to investigate Balfour’s Construction Services UK arm, reaches a positive conclusion.