Almost £400mln was wiped from the value of Balfour Beatty (LON:BBY) after it sounded the earnings alarm for the fifth time in just two years and said executive chairman Steve Marshall is falling on his sword.
The FTSE 250 listed group announced a £75mln “profit shortfall” from its UK construction services group.
It has appointed the accountant KPMG to “undertake a detailed independent review of the contract portfolio” within the business.
“The review will focus on commercial controls, on 'cost to complete' and contract value forecasting and reporting at project level,” Balfour said.
“KPMG are expected to report back to the board by the end of the year. Trading across the rest of the group remains in line with expectations.”
Few were surprised to hear Marshall had decided to go. The company is currently without a chief executive officer (CEO), and Marshall will hang on until a new CEO is in place, at which point Marshall will give up the role of chairman.
The shares, down 40% in the year to date, fell 25% in morning trade to 170p. That values the business at £1.2bn.
Amrit Panesar, senior trader at Accendo Markets, said: “Only in July the company announced its fourth profit warning in two years causing shares to plummet 17%.
“This morning, wait for it, NUMBER FIVE – another profit warning.
“Write downs across a number of key contracts are to blame. Investors need to question the future for Balfour and whether five warnings in two years is a sign to jump ship.”