Global infrastructure and building firm Balfour Beatty revealed the scale of its slide into the red, as it unveiled construction losses of £57 million during a sobering start to the year.
The group reported a pre-tax loss of £6m for the first six months of the year a turnaround of almost £100m on the £92m profit booked 12 months ago with revenues falling 3% to just under £5 billion.
Earlier this year the firm was forced to issue a profits warning over the performance of its UK construction arm amid “extremely tough” trading conditions.
Now Balfour named for Dundee-trained engineer George Balfour and business partner Andrew Beatty, whose first contract was for the construction of a Dunfermline tramway in 1909 say income in the division fell 16% in the period, outweighing a better performance in the US and rest of the world markets.
Exceptional items including £17m in restructuring costs relating to closure of three UK regional divisions with “weak” prospects, losses on the sale of European rail businesses, and a £12m write-down on the value of its interest in the now-sold Exeter Airport also hampered profits.
Balfour blamed a “difficult external environment”, but highlighted its efforts to capitalise on tertiary education markets in the US and UK, including the financial close of a £63m postgraduate student accommodation and outreach centre development in the Holyrood area of the capital for Edinburgh University.
It also trumpeted its role as a “leading investor” in the growing offshore power sector after being named as a preferred bidder to provide transmission links for the Gwynt y Mr windfarm off the north Wales coast.
Financial close is expected on similar interests in the Thanet and Greater Gabbard arrays later this year.
The company’s contracts also include a £130m slice of London’s Crossrail scheme, as well as a revamp of London’s Blackfriars station and the widening of the M25.
An overhaul of the UK construction business saw a new CEO of the division, Nick Pollard, appointed at the end of April.
“Our markets continue to be challenging, but our actions are delivering the intended results,” Balfour group chief executive Andrew McNaughton said.
“With sustained focus on operational delivery, we expect to achieve a performance in our continuing operations that is in line with the current expectations for 2013.”
Stock in Balfour, which has suffered a string of slumps following dismal market reports this year, closed the day down 17p at 233.10 as it said it would hold the interim dividend at 5.6p per share.