Balfour Beatty Plc 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 London-based company until a successor is appointed. Balfour also said in a statement today it’s considering a possible sale of Parsons Brinckerhoff, the New York-based infrastructure consulting company it bought for $626 million in 2009.
The stock fell 20 percent, the steepest decline since Oct. 20, 1998, erasing 394 million pounds ($669 million) from its market value. The shares dropped 57.2 pence to 228.60 pence.
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.