Balfour is also considering a sale of its Parsons Brinckerhoff consulting business following the latest profit warning.
Problems at UK construction continued into 2014 despite a string of profit warnings last year and remedial action led by McNaughton.
Balfour confirmed in a trading update this morning: “The decline in profit expectations is predominantly within the UK construction business, where profits are now expected to be £30 million lower than previously anticipated.
“Actions taken in 2013 to improve the operational issues in the UK construction business are taking effect, but at a slower pace than expected.
“There has been significant performance improvement in the regional construction business, but the mechanical and electrical engineering (M&E) and major buildings projects businesses have both experienced significant operational issues.”
The M&E division suffered an “extremely challenging” first quarter of the year while major projects “experienced further cost increases and delays”.
Balfour bought Parson Brinckerhoff in 2009 and it could now be sold as part of an ongoing review of Balfour “to simplify the Group structure and create a more focused Group.”
Non-executive chairman Steve Marshall has taken over from McNaughton as executive chairman until a successor is appointed.
Marshall said: “Today’s trading update is once again disappointing.
“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.
“Our recent strategic review meanwhile has concluded that a sale of Parsons Brinckerhoff could deliver attractive shareholder value and make Balfour Beatty a simpler and more focussed Group going forward.”
Balfour shares dropped 16% in early trading this morning.