Balfour Beatty 350 Belfast jobs safe despite profits warning, says firm
Troubled engineering group Balfour Beatty has said another severe profits warning will have "no impact whatsoever" on its 350 Belfast-based staff.
The engineering firm, which has a base at the Gasworks in the city, is set to slump into the red for the second year in a row after warning over another hit to results.
In the group's fifth profits alert in 18 months, Balfour said its pre-tax profit would be £120m-£150m lower after an ongoing review of the business found further "legacy issues" in the UK, US and Middle East.
Brokers had forecast the group would make a small pre-tax profit of between £50m and £70m this year, but the fresh warning will push the business into a loss.
Shares, which have lost a third of their value since their peak last March, fell as much as 3% yesterday.
The construction industry was one of the most heavily hit sectors in Northern Ireland and across the UK following the recession in 2008.
The group revealed in March it had slumped to a £304m pre-tax loss and cancelled its final dividend, with boss Leo Quinn warning of "major short-term challenges''.
Professional services group KPMG is carrying out an in-depth review of the troubled group. It previously found a number of shortfalls in the value of contracts.
Just 18 months ago, Balfour celebrated a £154m contract to convert London's Olympic Stadium into a multi-use venue that is set to host Rugby World Cup matches this year before becoming the home of West Ham United.
But since then, it has issued five profit warnings, which including the latest alert add up to as much as £360m, while chief executive Andrew McNaughton has also left.
Mr Quinn, who took the helm in January, said that although the group was working through its contract issues, "legacy challenges" remained.
He added that he was seeing improving signs of cash performance, which convinced him that the business would be a success over the long term.
The group also pointed out that it was making good progress against its £100m permanent cost reduction programme.
Balfour has moved to simplify its UK business, with Mr Quinn taking direct control of the major construction projects division - a problem area in the past.
The latest warning is seen as likely to revive speculation about Balfour being vulnerable to a fresh takeover attempt, almost a year after it closed the door on an on-off £3bn merger with Carillion.
Also, Balfour in December rejected a £1bn bid for its public private partnership contracts, which include long-term projects.
The upper amount by which Balfour Beatty expects profits to slide