BALFOUR Beatty has reported a loss of £59 million for 2014 and will not be paying a dividend to shareholders following a troubled year.
Losses could have been far higher were it not for the sale of Parsons Brinckerhoff for a £234 million profit.
Its Construction Services division made an operating loss of £391 million.
The Board revealed they had decided not to recommend a final dividend in order to ensure balance sheet strength is maintained, but expects to reinstate the dividend at an “appropriate level” by March 2016.
The company claims “significant” progress has been made in the early months of 2015 with Board changes, senior appointments, programme work streams established and consolidation of UK support functions already underway.
Leo Quinn, Group Chief Executive said, “Balfour Beatty is a global name built on the exceptional engineering skills of its people. This strength is evidenced by the continuing flow of landmark contracts across the Group. The business model also balances Construction Services and Support Services with a successful Investments business which will continue to create significant value.
“Over the next two years we should work through the severe legacy of “problem” construction projects. However, in tackling the cultural change required to ensure these issues are behind us, we face major short-term challenges. The key is that we are determined to address this through self-help. Our transformation programme, Build to Last, is gaining rapid traction and we are driving initial improvements of £200 million cash in, £100 million cost out over 24 months. In addition, our Investments portfolio will provide the financial flexibility of both reliable income and the sale of maturing assets into a strong market.
“To maintain balance sheet strength throughout this period, we have already cancelled the share buyback and re-phased our pension fund payments with the support of the trustee. We have also decided not to recommend a final dividend this year, but expect to reinstate the dividend at an appropriate level by March 2016.
“I remain convinced that all our operations can achieve industry-standard performance as markets improve. The real prize is a sustainable return to profitable growth, built on the Group’s unique capabilities, underpinned by leaner, stronger processes and flawless execution. Longer term we believe that as a leader in its core markets Balfour Beatty should be able to deliver superior returns to the benefit of its customers, employees and shareholders.”