Seventh warning by Balfour Beatty

EMBATTLED infrastructure group Balfour Beatty has issued yet another profits warning – its seventh in just two years, writes Peter Campbell.

Shares fell 8pc after the group said profits would be £150m lower after it discovered more problems with contracts.

New boss Leo Quinn, who was parachuted in to rescue the business following a calamitous two years, had ordered a review of its operations after a KPMG probe revealed massive incompetence stretching back for years in the way it handled its contracts.

Quinn, who joined the firm in March, vowed to change the culture of the business.

Yesterday the company said it had identified ‘legacy issues’ in its UK, US and Middle Eastern operations.

These would hit its profits by £130150m this year.

Britain will account for around two-thirds of the shortfall, the firm said.

This is likely to push it into the red, as analysts had forecast a £77m annual profit.

Last year the company made a loss and axed its dividend payments in a bid to restore financial health. Shares fell 10pc before easing to trade 4pc or 8.2p lower at 220.2p.

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.’

The company received a £2bn bid approach last year from Carillion.

But a dispute over Balfour’s US construction group Parsons Brinckerhoff – which it wanted to sell though Carillion wanted to remain part of the company – led to a breakdown in the talks.

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

Without the windfall, last year’s losses would have been even steeper.