Opinion: What is going wrong at Balfour Beatty?

Grant Prior 9 years ago

Everyone likes to have a pop at the biggest player in any industry.

But Balfour Beatty is making itself an easy target for detractors as it lurches from crisis to crisis.

Yesterday was a typical day in the Balfour soap opera with a £50m profit warning and another management shake-up.

A regional managing director was bundled out of the door after holes were found in local contracts.

And it’s all change at the top again with Mike Peasland and Andrew McNaughton taking on new roles in a bid to steady the ship.

It must leave the thousands of Balfour staff and shareholders wondering what on earth is going on.

How many reviews does it take to find out what the problems are and how to fix them?

Company foot soldiers were hit with 650 redundancies last year after a sweeping review of operations.

The promise then was of jam tomorrow as efficiency savings kicked-in.

Instead they have been rocked by two profit warnings in six months – the latest coming just over a month after posting annual results.

The latest management merry-go-round is an attempt by the board to reassure worried shareholders that Balfour’s newly unearthed problems are going to be rooted out.

With the firm’s credibility in the City on the line, it must also spell a period of further job insecurity among staff who are only just coming to terms with the last shake-up.

Balfour is certainly not the first firm to run into problems with regional contracts in this recession.

A major temptation for a contractor the size of Balfour is to buy local work at any cost just to keep your resources employed.

That infuriates smaller regional rivals.

And it has a nasty habit of coming back to bite you when the final accounts are drawn-up.

Balfour CEO Andrew McNaughton took charge in January after being groomed in senior roles at Balfour Beatty for a decade.

It has certainly been an interesting few months.

There has been enthusiastic talk of  a refocussed business, global markets and major engineering projects ahead.

Before Balfour heads off in that direction, McNaughton has the small matter of sorting a few things out closer to home.

He has to make sure this latest reshuffle works because in the world of profit warnings it’s often a case of three strikes and you are out.



Latest news

Overbury gets green light for £300m Citi Tower refurb

Revamp of 42-storey Canary Wharf tower will be one of London's biggest ever refurb jobs
6 hours ago

McAleer & Rushe confirms £23m Manchester hotel job

Work to start on 17 storey Maldron hotel next month
31 mins ago

£130m cash injection kick-starts first Wirral Waters resi blocks

Wirral Waters One 600-home project secures funding
7 hours ago

Government commits £100m to Sizewell C nuclear project

Government’s cash injection hoped to ‘maximise investor confidence’ while EDF courts private investors
6 hours ago

Public raise alarm over unsafe roof work high above Manchester

Court hears how HSE swooped to shut down site after tip off
23 hours ago

Realstar and Lendlease ink £120m London build to rent deal

Forward funding deal for 251 private rental flats at Deptford Landings scheme
7 hours ago

Balfour Beatty chalks up 100th Scape civils job

Procurement body prepares to invite bids next month for next generation net zero civils framework
7 hours ago

Forterra hikes brick prices by 10%+ with more rises to come

Demand continues to surge and costs increase for masonry products giant
1 day ago

Go-ahead for £40m Manchester spec office scheme

Local firm PP O'Connor to demolish Speakers House for 17-storey office block
1 day ago

Spanish giant lands deal to build £683m waste power plant

New plant will turn black bin bag waste into electricity
2 days ago

Henry wins six Ealing council housing projects

Henry Construction secures £40m West London council homes deal
1 day ago

Landsec eyes £825m Glasgow Buchanan Galleries rebuild

Glasgow's mammoth shopping mall could be demolished for mixed-use city quarter
2 days ago

Mace lands £300m London court and police complex

Main construction works to start on Fleet Street site this autumn
2 days ago

Graham bags £30m Birmingham build to rent job

Work set to start Crown Works residential scheme in the Colmore Business District
1 day ago

Balfour Beatty names new investment arm chief

Leo Quinn promotes former major projects finance director Gavin Russell
2 days ago

M1 fraud probe exposes contract management problems

M1 J13-16 investigation finds £320,000 of central barrier scrap metal went missing
2 days ago

Beaumont Morgan Developments goes into administration

Begbies Traynor now in charge of £47m turnover Manchester contractor
2 days ago

Green light for major overhaul of Surrey pharma campus

Kier and Mace bidding for revamp project with three storey glulam building at its heart
2 days ago

Morgan Sindall hires Crossrail safety director

Carole Bardell-Wise joins infrastructure business as SHEQ Director.
2 days ago

Galliford Try bags £28m Dover inland border control facility

Major inland border facility to be built alongside the A2 outside of Dover
2 days ago

Plans go in for £280m Leeds Whitehall Riverside scheme

Major office and flats scheme to be built next to River Aire
2 days ago

Roofer dies in six metre plunge through asbestos sheets

Court hears no safety nets were fitted on site
3 days ago

Subbies stop working for Beaumont Morgan Developments

Manchester based contractor was delivering Fortis Quay for associate development company
3 days ago

Gove threatens ban on cladding suppliers failing to pay for retrofits

Cladding and insulation suppliers now in firing line for cash for £9bn post-Grenfell remediation bill
4 days ago

Bill for £22bn HS2 extension to Manchester goes to Parliament

52-mile extension of HS2 to Manchester via Manchester Airport will support 17,500 construction jobs
3 days ago

Galliard scoops up trio of sites for schemes worth £265m

Sites in Redbridge, Ipswich and Milton Keynes to be developed
3 days ago

Plans in for 350-flat Salford student scheme

Developer X1 hopes to start 15-storey building later this year
3 days ago

Green light for Birmingham Paradise landmark hotel

17-storey hotel will be the 'cornerstone' of Phase 2
6 days ago

Structural steel price jumps another £50 a tonne

British Steel blames New Year's price hike on continuing high product costs
6 days ago

Enabling works start at £400m Manchester First Street

Downing to start main construction in March of three resi buildings rising up to 45 storeys
6 days ago

Contractor services