Balfour Beatty reports £59m loss and axes dividend
UK construction firm Balfour Beatty has reported a loss of £59m for 2014 and said it will not be paying an annual dividend to shareholders.
That compares with a pre-tax profit of £185m the previous year.
It comes after a tumultuous year for the firm, which saw the company issue four profit warnings.
Were it not for the sale of Balfour's US construction business, Parsons Brinckerhoff, losses for 2014 would have amounted to £304m.
Balfour sold the business for £753m in October last year making a profit on the sale of £234m.
Balfour Beatty chief executive Leo Quinn, who joined the construction firm at the start of the year from defence technology firm QinetiQ, said the firm would spend the next two years working through its "severe legacy of problem construction projects".
He said the firm's performance had been in decline since 2010, but admitted "the sharpest and most noticeable decline" had occurred in the last 12 months.
Mr Quinn added that "in tackling the cultural change required to ensure these issues are behind us, we face major short-term challenges."
In total, Balfour reported losses of £391m in its UK construction division for the year as a result of contractual issues, a group wide restructuring programme and contractual delays. The company added its cost base remained too high.
Major projects include a £154m contract to convert London's Olympic Stadium into a multi-use venue which will host the 2015 rugby World Cup matches before becoming the home of West Ham United.
Balfour also reported underlying losses of £15m in its Middle East construction business, which it said was due to problems with two specific contract positions within the mechanical and electrical engineering joint venture business.
Roger Johnston, analyst at Edison Investment Research, said: "While the turnaround in performance will not be easy to achieve, we believe that Quinn's track record and no-nonsense approach will drag the business with him."
In May last year chief executive Andrew McNaughton resigned after the firm issued its third profit warning that year.
Balfour spent much of the rest of 2014 fending off a takeover approach from rival Carillion.
The deal collapsed after disagreements over Balfour's plan to sell Parsons Brinckerhoff, which Carillion wanted to keep as part of the takeover.
In January, the firm said it had cancelled a proposed £200m share buyback and said it was reviewing its dividend policy.