22 January 2015 – trading update
The international infrastructure group has announced the summary findings from the review of the UK construction business by KPMG, an updated valuation of its Investments Portfolio and a trading update in advance of full year results, due to be released in March. As a result of the KPMG review and recommendations the company expects to reduce 2014 UK construction profits by a further £70m. It will also assess the overall level of contract risk provisions in the UK construction business in light of the operational issues identified and will announce the outcome at the time of the full year results. The Directors’ Valuation of the existing Investments Portfolio increased to £1,300m and outside of UK Construction there has been no net material change in underlying trading since the last trading update. In order to maintain a strong balance sheet, the proposed share buyback of up to £200m has been cancelled and the dividend policy is to be reviewed in March at time of the full year results. Overall, there are better opportunities elsewhere but those who are already invested should HOLD.