Investor fury at Balfour Beatty profit warning
SHAREHOLDERS are angry and concerned over the latest trading update from beleaguered construction firm Balfour Beatty.
The update, published yesterday, is the company’s third in five months, and revealed a £75m profit shortfall in its construction services UK business.
Balfour’s share price fell by 20 per cent after the report and closed down 15.3 per cent. A shareholder told Morning Wire: “That shows there is anger.”
The source continued: “People are getting worried that there’s a systematic issue across Balfour. With KPMG involved, they are wondering if there is something wrong aside from bad contracts.”
The shareholder added that the latest profit warning raised further questions about the failed merger with Carillion, which fell apart in August: “Why did they fight so hard against that deal? Maybe because they knew Carillion would have to open up the books? That’s the kind of thinking that’s creeping in.”
Andrew Gibbs, support services analyst at Investec, said: “There would have to be a significant reclassification of terms, and nothing will happen until we get clarity on the KPMG review. A wider issue within the company is a legitimate concern.”
Balfour Beatty did not comment.