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Construction profit warnings rise

Profit warnings from construction companies listed on the London Stock Exchange rose sharply during the first three-quarters of 2014.

There have been nine so far this year, more than in the whole of 2013, according to new research from Ernst & Young.

Last year there were seven profit warnings from five listed companies.

Three of the profit warnings in 2014 so far have been from Balfour Beatty, the most recent in September.

Last week, Morgan Sindall warned its construction margins would fall to between 0.3% and 0.5% due to inflation, project overruns, and a fire on a University of Nottingham project.

Some 21% of FTSE construction companies have issued profit warnings in the year to date, compared to a market average of 14%.

The Ernst & Young research said that “the majority of profit warnings in 2014 relate to contract issues including cost overruns, adjustments or delays”.

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