Shares lost around one-sixth of their value after the company revealed that pre-tax profits for 2014 are expected to be significantly below previous expectations, which, according to the company, run the range from £145mln to £160mln, although data conglomeration specialist Factset claims the current median forecast is actually £185mln.
The UK Construction business is the main culprit, with the company revealing it now expects a £30mln shortfall in this division compared to previous expectations. The group flagged “poor operational delivery issues on a number of contracts” in the mechanical and electrical engineering business, and said actions taken last year to improve the UK construction business are taking longer to feed through than anticipated.
Other parts of the business continue to perform well and are trading in line with management expectations.
Chief executive Andrew McNaughton has quit his post with immediate effect, with chairman Steve Marshall taking on executive responsibilities until a replacement for McNaughton can be found.
The company has performed a strategic review of its operations, as a result of which the company is open to offers for its Parsons Brinckerhoff business.
"Today's trading update is once again disappointing,” admitted 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. 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," he added.