Balfour Beatty Plc (BBY) fell the most in 16 years after the British construction company said earnings will be “significantly” lower than forecast and its chief executive officer resigned.
Andrew McNaughton stepped down as CEO after 13 months, and Chairman Steve Marshall will take over running of the company until a successor is appointed, London-based Balfour said in a statement today. The stock fell as much as 21 percent, the steepest decline since Oct. 20, 1998, erasing about 400 million pounds ($677 million) from its market value.
Balfour has been hit hard by the global economic crisis, with a lack of building work in the U.K. and the cancellation of projects across Australia’s resources sector. The company cut hundreds jobs in Australia last year and took steps to improve its U.K. business after a reorganization in 2012 distracted management from identifying failures in operations and supply chain management.
“Whilst most parts of the group are trading in line with management’s expectations, we now expect a 30 million-pound shortfall in our U.K. construction business in 2014,” the company said.
Pretax profit for 2014 is forecast to be 145 million pounds to 160 million pounds, according to Balfour. That’s compared with adjusted pretax profit of 187 million pounds last year.
The shares dropped 55.6 pence to 230.20 pence, a decline of 20 percent, as of 9:16 a.m. in the U.K. capital.
To contact the reporter on this story: Sara Marley in London at firstname.lastname@example.org
To contact the editors responsible for this story: Simon Thiel at email@example.com Andrew Noel, Robert Valpuesta