Balfour suffers 23% slide in UK construction revenue

Grant Prior 9 years ago
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Balfour Beatty saw UK construction revenue fall by 23% during the first quarter of this year.

The drop was confirmed in an update to the City today following the firm’s £50m profit warning last month.

Commenting on performance across its construction services division during the first quarter, Balfour said: “In a UK marketplace which continues to be adversely impacted by the shortage of major public projects and fierce competition in the regional markets, our total construction revenue declined by 11% in the first quarter, driven mainly by a 23% fall in UK construction.”

The UK construction business is expected to break even for the full year after Balfour discovered a series of problems with regional and major contracts which prompted the profit warning.

A major reorganisation will see a raft of management shown the door.

Balfour said: “As we progress through the year, our business is expected to benefit from the cost efficiency programmes we have in place, a recovery in operational performance in UK construction and the ongoing implementation of strategic initiatives.

“Based on these dynamics and the first half weighting of the profit shortfall in UK construction, we expect our profits to be more heavily skewed to the second half than in previous years.

“We remain confident that the strategy we have set out for the medium term will transform Balfour Beatty into an increasingly diverse and international business which is better positioned to benefit from structural growth in infrastructure markets with less cyclical characteristics.”

 

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