12th Aug 2015 06:20
LONDON (Alliance News) - Construction and support services company Balfour Beatty PLC on Wednesday scrapped its interim dividend as it posted a substantially wider pretax loss for the first half of 2015 thanks to writedowns of onerous contracts in its UK construction arm.
The FTSE 250-listed group said its pretax loss for the six months to the end of June was GBP150 million, sharply wider than the GBP58 million loss it posted a year earlier. As a result of the drop in profit, the company said it won't pay an interim dividend, having paid 5.6 pence per share a year earlier.
Balfour has experienced a difficult few years after its UK construction business ran into problems after winning contracts which proved to be risky and ultimately unprofitable. It initiated a review in September last year of its UK construction services business in an attempt to stem the tide of profit warnings which dragged its shares lower over the course of 2014.
The group said the profit shortfall was down to the UK construction business and the loss-making contracts, though it said it expects more than 90% of these problem contracts to be at practical or financial completion by the end of 2016.
Revenue for Balfour also declined in the half, down to GBP4.19 billion from GBP4.23 billion, though its order book remained broadly stable at GBP11.3 billion, compared to GBP11.4 billion at the end of December.
"Inevitably the headline numbers set out the consequences of the historic issues that are now being tackled. However the continuing confidence of our customers in Balfour Beatty's expertise, the positive response of our people to change, demonstrated by our excellent net cash performance, and the underlying strength of our balance sheet, supported by the investments portfolio, all reinforce my conviction that over the medium term we can provide our customers, employees and shareholders with superior returns," said Leo Quinn, Balfour's chief executive.
By Sam Unsted; [email protected]; @SamUAtAlliance
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