Britain's biggest builder crashed into the red today as it counted the cost of a struggling UK building business and the end of Australia’s mining boom.
Balfour Beatty — which is working on Crossrail and the legacy transformation of Olympic venues including Zaha Hadid’s aquatic centre — made an overall £6 million pre-tax loss in the first half of the year against a £92 million profit a year earlier.
The construction arm plunged to a £41 million operating loss as it booked £50 million in writedowns on profits in its UK building business, which accounts for 30% of the total. In Australia, the firm has suffered “very challenging” trading as a host of mining projects are cancelled in the wake of falling commodity prices and slowing demand from China, sending profits in its professional services division spinning £21 million lower.
Chief executive Andrew McNaughton held the dividend unchanged at 5.6p and pointed to a 3% rise in the construction firm’s overall order book to £13.9 billion in the first half. He has also made management changes and closed offices in the UK business, which is now showing signs of stabilising. “There are good signs but there is still a long way to go,” he said.
McNaughton kept full-year profit guidance unchanged but the City was unimpressed by the figures, and the shares fell 7.1p, or 3%, to 243p. Deutsche Bank analysts said the results were “slightly softer than expected”.
