Wednesday preview: Balfour Beatty to swing to annual loss and suspend dividend, analysts predict

LONDON (ShareCast) - Balfour Beatty (Other OTC: BAFBF - news) is expected to report annual losses and suspend its dividend on Wednesday following four profit warnings. Analysts predict the construction company will post losses of £60m, compared to a pre-tax profit of £185 the previous year, as new chief executive Leo Quinn announces his turnaround plans.

Quinn is also expected to unveil a further £200m downgrade in the value of contracts.

At the start of the year Balfour revealed that it will likely reduce 2014 UK construction profits by a further £70m, following a review by KPMG which exposed holes in the division.

"The KPMG review in January in construction services UK (CSUK) led us to revise down our group expectations to a £67m PBT loss and at that time the new CEO, Leo Quinn, pointed to the expectation of further management actions in this area to be outlined with full year results which in our view will take the form of both further contract provisioning and a cost reduction and investment programme to put the group back onto a solid footing," Numis said in a note to investors.

"This is likely to be the focal point of the results, notably as we expect non-CSUK businesses investments, support services construction US and rest of world construction to exhibit less dramatic trends in line with H1 patterns." The company has been embroiled in scandal following the investigation into the way it handles its contracts and a string of writedowns.

Andrew McNaughton was fired last April after less than a year at the helm after the group warned of another £30m blow to profits. The firm spent most of last year without a boss before Quinn was appointed in January.

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