KPMG called in to review project controls at Balfour Beatty

KPMG called in to review project controls at Balfour Beatty

Big Four firm called in as Balfour Beatty's UK construction services division sees margins eroded

ANOTHER PROFIT WARNING at Balfour Beatty has prompted the construction business to call on KPMG to undertake further cost control and project reviews.

The profit warning, Balfour Beatty’s fifth in less than two years, sees a shortfall of £75m revealed in its Construction Services UK division. KPMG, which has been working on contract control and reporting disciplines within the engineering services and parts of its regional business, has seen its remit increased.

The Big Four firm is to review commercial controls, on ‘cost to complete and contract value forecasting’ at project level. KPMG are expected to report back to the board by the end of the year.

The £75m profit reduction is split across: £30m within engineering services; £20m within large London area building projects; £15m within regional construction; and £10m within major infrastructure projects.

“There has been inconsistent operational delivery across some parts of the UK construction business and that is unacceptable. Restoring consistency will take time and it has our full focus,” said Balfour Beatty executive chairman Steve Marshall.

Marshall will step down as interim CEO and as chairman when replacements are found for the roles.

The total number of problem contracts has increased to 25, from the 21 previously disclosed. Of these, 19 are due to reach operational completion in 2014.

Balfour Beatty had previously indicated that its withdrawal from bidding on any other tier 1 contractors in London, and withdrawing from bidding on new contracts in the south-west region.

The firm is trading at 5.4p down in this morning’s trading, at 185.1p – a value of £1.3bn by market cap.

For more markets and company data visit the Share Price Centre

Whitepaper

The Future of Finance is in the CFO's Hands

Business The Future of Finance is in the CFO's Hands

4m
Save a Week a Month Consolidating Accounts

Accounting Software Save a Week a Month Consolidating Accounts

5m
Mitigating Risk Through Internal Control

Legal Mitigating Risk Through Internal Control

6m
Could tax season have run more efficiently?

Corporate Tax Could tax season have run more efficiently?

6m

Related Articles

1,000 jobs lost as Jamie Oliver restaurant chain goes into administration

Company News 1,000 jobs lost as Jamie Oliver restaurant chain goes into administration

3m Tom Lemmon
KPMG revenues rose by 8 percent this year in strongest growth in a decade

Company News KPMG revenues rose by 8 percent this year in strongest growth in a decade

9m Beth McLoughlin, Managing Editor
Kreston Reeves celebrates £3.6m revenue increase with recent hires and merger

Company News Kreston Reeves celebrates £3.6m revenue increase with recent hires and merger

9m Lucy Skoulding, Reporter
KPMG announces senior partner promotion in Newcastle

Accounting Firms KPMG announces senior partner promotion in Newcastle

3y Stephanie Wix, Writer
KPMG scoops Dorcaster audit

Accounting Firms KPMG scoops Dorcaster audit

3y Stephanie Wix, Writer
KPMG UK breaks £2bn barrier, while partner pay falls

Accounting Firms KPMG UK breaks £2bn barrier, while partner pay falls

3y Stephanie Wix, Writer
Advisory services push KPMG International to 8% growth

Accounting Firms Advisory services push KPMG International to 8% growth

3y Stephanie Wix, Writer
PwC scoops Rolls-Royce audit as tender results pile up

Accounting Firms PwC scoops Rolls-Royce audit as tender results pile up

3y Stephanie Wix, Writer