Balfour Beatty plunges on profit warning

Construction firm Balfour Beatty said full year profits were likely to come in lower than expected after poor performances in the UK and US.

Construction firm Balfour Beatty said full year profits were likely to come in lower than expected after poor performances in the UK and US.

It added that woes in its construction services division were likely to continue into 2013, causing its share price to tank 9.5%.

The firm said difficult trading conditions had persisted in the third quarter in its two major markets.

US construction markets remained depressed, and the performance of the company's UK construction business was weaker than anticipated, it said.

Structural problems in European Rail markets added to the challenges.

"As a result and based on the outturn for the third quarter, profitability in 2012 will be slightly lower than expected at the time of the half-year results although this will be somewhat offset by a slightly lower effective tax rate," the company said.

"Furthermore, the conditions that have led to a recent decline in the order book point to 2013 being a difficult year for Construction Services."

After a small decrease in the first half in the Construction Services order book, Balfour saw a more significant decline in the third quarter.

"As a result, even though order intake in our other businesses was stable, the group order book closed at £14.4bn at the end of September, down from £15bn at the end of June," the statement said.

The highlight of the announcement was the firm's Professional Services, Support Services and Infrastructure Investments businesses, which performed in line with expectations.

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