One-fifth was wiped off the share price of Balfour Beatty yesterday, after the infrastructure firm issued its third profit warning in 18 months and said its chief executive was stepping down “with immediate effect”.
The FTSE 250-listed company said that while most parts of the group were trading in line with management’s expectations, it expected a £30m shortfall in its UK construction business this year, after a slowdown in large projects and losing out on a number of contracts to rivals. “Actions taken in 2013 to improve the operational issues in the UK construction business are taking effect, but at a slower pace than expected,” it said.
As part of a strategic review, Balfour is now considering the possible sale of its engineering consultancy Parsons Brinckerhoff, which it bought in 2009 for $626m (£369m) and makes up one of the biggest parts of the business.
Andrew McNaughton, who took over as chief executive just over a year ago, was asked to step down from the role as the company looks to turn around its fortunes. Executive chairman Steve Marshall is taking on the role on an interim basis, with headhunters to be appointed imminently to find a permanent replacement.
“Today’s trading update is once again disappointing,” said Marshall. “The board is committed to rapidly addressing the root causes. As a result, action is being taken to improve operational delivery in the UK construction business.” Shares closed at 228.60p – a drop of 57.2p.