Construction still a drag for Balfour Beatty

Balfour Beatty, the FTSE 250 infrastructure group which shocked the market with a profit warning last month, said that its performance has not changed since the last update.

The company said in April that full-year profits in the UK construction division would be reduced by £50m due to a poor performance amid "difficult market conditions".

Meanwhile, while its other business remain in line with expectations, the German rail unit is facing a £10m profit shortfall.

The stock had dropped to a 52-week low of 206.7p since the trading update on April 29th, and stood nearly 14% lower over the past month and 21% down since the start of 2013 (by Monday's close).

Balfour confirmed on Tuesday that revenues in Construction Services had fallen by 11% in the first three months of the year mainly driven by a 23% drop in the UK. Elsewhere in the Professional Services and Support Services divisions, activity has remained in line with expectations.

Nevertheless, the company's total order book had increased by 5.0% by the end of the first quarter (March 31st) to £16bn and "continues to give us good visibility".

Balfour said: "As we progress through the year, our business is expected to benefit from the cost efficiency programmes we have in place, a recovery in operational performance in UK construction and the ongoing implementation of strategic initiatives.

"Based on these dynamics and the first half weighting of the profit shortfall in UK construction, we expect our profits to be more heavily skewed to the second half than in previous years."