Balfour Beatty has hinted at a potential sale of its professional services division, Parsons Brinckerhoff, after anticipating a ‘significant’ fall in pre-tax profits.
Publishing a trading update, Balfour Beatty also announced that its chief executive Andrew McNaughton had stepped down following news that the company’s UK construction business is expecting to record profits £30 million lower than earlier forecast.
Pre-tax profits for 2014 are expected to be between £145 – £160 million, down from £187 million in 2013 and £277 million in 2012.
A strategic review into the poor results has led the company to now “evaluate options” for a possible sale of Parsons Brinckerhoff, which it acquired in 2009.
Balfour Beatty is in the process of selling its German rail business, having already sold off operations in Spain and Scandinavia.
The company’s M&E business has also experienced an “extremely challenging first quarter” with a low order intake and “poor” operational delivery.
Despite a solid performance from Balfour Beatty’s rail division in the UK, revenues in the Australian rail business were lower than expected due to delays in tendering for new contracts.
Steve Marshall, who has taken over as executive chairman until a successor is appointed, said: “Today’s trading update is once again disappointing. 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.”
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