The troubled builder Balfour Beatty racked up a £150m loss in the half year to 26 June, but there is light at the end of the tunnel, according to its new chief executive Leo Quinn.
Write-offs on a clutch of disastrous contracts sealed in the depths of the recession have triggered a slew of profit warnings over the past two years, even prompting an opportunistic takeover attempt by its smaller rival Carillion last year.
The losses at the FTSE 250 group are nearly three times bigger than last year’s £58m reverse. But the company, whose London deals include the conversion of the Olympic stadium for West Ham, said about 90 per cent of the legacy contracts would be settled by the end of next year. Balfour also plans to restore the dividend in March and has made £25m in cost savings.
Mr Quinn, who ruled out mass redundancies for its 20,000 UK staff, said: “We’ve come an awfully long way. The foundations of this business are strong.”
Investors welcomed the update and the shares jumped as much as 5 per cent in late afternoon. They closed 9.9p, or 3.9 per cent, higher at 261.6p.
Olivia Peters, an analyst at RBC Capital said: “We believe that Balfour Beatty is through the worst. The new management team is reviewing the business and will use this as an opportunity to update us on their plans for the business.”Reuse content