Balfour Beatty yesterday revealed that its profits were set to be 拢130m to 拢150m below previous expectations as more legacy costs continue to crawl out of the woodwork. [] The share price fell 8% from 248.4p to 228.4p during the day.
Britain鈥檚 biggest construction company has now issued seven profits warnings in two years and warned of 拢478m of profit shortfalls and risk provisions since the beginning of 2014.
Westhouse analyst Alastair Stewart rated Balfour Beatty as a 鈥楽ell鈥�, saying: "It all looks very negative and could run and run."
However, investment bank Berenberg said it believed Balfour Beatty was now through the worst of its problems and reiterated its 鈥楤uy鈥� rating 鈥渂ased on the cheap valuation and significant self-help potential under the new management team鈥�.
It added: 鈥淚n the UK, while further warnings cannot be ruled out, we think the company is through the worst.鈥�
However, it did express concern that legacy issues have now also emerged at the US business. Previously they had been focused on the UK. 鈥淭he shortfall in the US is more worrying as this business has been profitable in recent years,鈥� Berenberg said.
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