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Balfour Beatty's legacy issues continue to weigh

Published: 09:43 09 Jul 2015 BST

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Last year, the group reported a loss of £59mln against a pre-tax profit of £185mln in 2013...

Troubled construction group Balfour (LON:BBY) saw shares ease as it issued yet another profit warning but said it was seeing signs of improving cash performance.

Last year was characterised by such warnings from the firm and it issued three in 2014 alone, while news last year was dominated by the long-running merger plan with rival Carillion, which it slapped down.

Balfour said today an ongoing review of the business had continued to identify legacy issues in the UK, US and Middle East which will result in an additional shortfall to 2015 pre-tax profit of between £120 million and £150 million.

The UK operations account for about two-thirds of the shortfall, it noted.

Last year, the group reported a loss of £59mln against a pre-tax profit of £185mln in 2013.

Had the group not successfully sold its US construction business - Parsons Brinckerhoff - losses reportedly last year would have been £304mln.

Chief executive Leo Quinn, who took the helm last October having left QinetiQ, said: "The issues we are working through are as I set out in March and legacy challenges remain.

"However, we are making encouraging progress on the group's transformation. The positive response of our people to change, the continuing confidence of our customers in Balfour Beatty's expertise and the first signs of improving cash performance reinforce my conviction in the group's long-term success."

Shares earlier nudged higher in mixed trading but were down 1.09% to 225.9p at the time of writing.

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