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Balfour Beatty issues £150M profit warning

Balfour Beatty has said that legacy issues within the business will result in a 2015 pretax profit shortfall of between £120M and £150M.

The UK accounts for around two thirds of the shortfall, with the rest coming from the US and Middle East.

The group today provided an update ahead of its half year results which will be announced in August.

The company did say that good progress on its drive to cut permanent costs by £100M was being made. It said it had also brought in new project disciplines and financial controls.

Net cash for the company is expected to exceed £200M at the end of the half year. Balfour Beatty said this is better than the same time last year and demonstrates its ability to “maintain balance sheet strength through self-help”.

Group chief executive Leo Quinn 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.”

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