8 May 2014
Balfour Beatty has announced that Andrew McNaughton, its chief executive, has stepped down with immediate effect.Â
McNaughton’s departure comes after the group issued a £30m profit warning in the UK for 2014. The company told investors on Tuesday that it expected its UK business to make between £145m and £160m in pre-tax profit this year, rather than the £190m that analysts had expected. Its shares have fallen 20% since the announcement was made.Â
Balfour has issued three profit warnings in the past 18 months. Last year, chief executive Mike Peasland stepped down in the wake of a £50m shortfall, which the company blamed on about 100 problem contracts in its UK regional businesses.Â Â
This time the fall in revenue was attributed to "adverse market conditions" in its M&E division as well as "further costs increases and delays" in its major building projects division. It also said that it had taken longer than expected to resolve "operational issues".
Andrew McNaughton (Source: balfourbeatty.com)
Balfour’s troubles have increased speculation that it would sell Parsons Brinckerhoff, the consulting business that it acquired in 2009. The firm said it was carrying out a strategic review, and would sell the company if there was "attractive shareholder value".Â Â
Balfour said it had appointed chairman Steve Marshall executive chairman until it found a successor for McNaughton. The company, which is the largest construction business in the UK, last year made a pre-tax profit of £187m.