好色先生TV

The boss of Balfour Beatty鈥檚 M&E business has stepped down, along with the firm鈥檚 group chief executive, after the firm announced a fresh 拢30m profit warning this morning.

Balfour Beatty today said that Balfour Beatty Engineering Services (BBES) managing director Phil McGuire had resigned with immediate effect,

McGuire has been with Balfour Beatty for 35 years and was given the role of heading up the firm鈥檚 new M&E business stream as part of the wide-ranging restructure the firm unveiled in 2012.

His departure follow a series of major changes at the M&E business in recent weeks, with three of the five regional engineering services directors replaced at the South, North-east and North-west operations, while one of Network Rail鈥檚 main project directors Uma Shanker was appointed to BBES in a new new role as chief operating officer.

Speaking to 好色先生TV this morning, Balfour Beatty鈥檚 UK construction chief executive Nick Pollard, said that 拢20m of the forecast profit shortfall was focused on the firm鈥檚 M&E business and that following a 鈥渧ery deep and rigorous review鈥� of the business over the past ten days McGuire had decided to step down.

He said that the remaining 拢10m forecast profit shortfall was focused on around 鈥渉alf a dozen鈥� projects in the building side of the major projects business.

McGuire鈥檚 resignation comes alongside that of Andrew McNaughton, Balfour Beatty group chief executive, who only took up his role in March 2013.

The 拢30m profit warning this morning followed on a 拢50m profit warning in April 2012, with profit at the firm ultimately falling 拢60m short of expectations last year.

Pollard, who was appointed by McNaughton to his role last June, said he would not be resigning as fixing the problems iwas 鈥渆xactly why I was recruited鈥� and that he expected it to take another 12 to 18 months to 鈥渞estore鈥� the UK construction business.

He said he had now stepped into the Balfour Beatty Engineering Services business as managing director on an interim basis ahead of a permanent appointment.

鈥淚 arrived ten months ago to get the show on the road and lead the turn around and we鈥檝e made a lot of progress in the last ten months in the regional and infrastructure  projects business, which we focused on quite rightly as being the areas that were the largest and that , in the case of the  regional business, was the area that had some issues and was the subject of a profit warning last year.鈥�

鈥淲e鈥檝e dealt successfully with much of that and now we鈥檙e addressing the rest of the business and the emerging market conditions.

鈥淲e will work tirelessly in order to turn the performance of the business around in the months ahead.

鈥淚 was recruited to work through this series of issues that appear to have been longstanding ones within the business and that鈥檚 exactly what I鈥檝e been doing 鈥� helping the team work through those issues and deliver a change in performance.鈥�

He said McGuire and McNaughton鈥檚 departures were about 鈥渢aking ownership鈥� for the problems identified in today鈥檚 trading update.

He said: 鈥淧hil McGuire, as the managing director, is responsible for the operational controls and commercial controls 鈥� or was responsible for those 鈥搃nside BBES  and he was the leader of that business and it was his responsibility as a leader to hold himself to account.

鈥淎nd that is the same as Andrew [McNaughton] as leader of our group 鈥� and sad though as it is, that is normal in business.鈥�

Pollard said the 鈥渄eep review鈥� of the M&E business over the past ten days covered all of its contracts and had identified 鈥渟ome operational and commercial issues on some of the M&E contracts鈥� as well as 鈥渟ome unwarranted optimism in terms of our risk position鈥�.

He said that this, combined with a 鈥渟lower than anticipated market recovery鈥�, meant the 鈥減rofit forecast for this year has been diminished鈥�.

He said he was confident that the 拢20m forecast profit shortfall in the M&E business had captured the extent of the problems. 鈥淏ut I鈥檇 be crazy to sit here and promise there will never be a loss making project in future - construction is intrinsically a high risk business,鈥� he said.  

鈥淗owever I am confident that we now have  fully open and transparent visibility  and that鈥檚 why we鈥檝e been able to communicate very quickly to the market the risks to our profit forecasts.鈥�

On the major building projects side, he said the 拢10m forecast profit shortfall had emerged due to a 鈥渢horough review鈥� of the current position of the problem jobs, most of which are due to reach completion this year.

He said: 鈥淎s the jobs approach their conclusion, commercial redress is being sought over certain matters - in light of the emerging commercial settlements and in light of trading that has gone on since the year end and the more detailed knowledge as those jobs come rapidly toward conclusion - we鈥檝e therefore flagged the risk to the forecast profits.鈥�