Balfour Beatty shares drop on second profit warning in six months Shares in Balfour Beatty lost more than 7 per cent of their value after the UK's largest construction company by sales issued its second profit warning in six months. The building group warned on Monday that further gloom in the UK's already bleak construction sector would knock £50m - 20 per cent - from its 2013 bottom line. Balfour Beatty cautioned that its UK construction business would deliver "significantly lower profits" than its previous 2013 expectations, which the company blamed on problems with its recent internal reorganisation and issues with its subcontractors. The group's latest monthly business reviews highlighted poor performance in the UK regional construction business . . . which led to an internal review. This review has concluded that a difficult external environment and internal reorganisation has resulted in specific instances of poor operational delivery," Balfour Beatty said. The news sent Balfour Beatty shares down 7.2 per cent to 228.8p in early London trading. The FTSE 250 company, whose current projects include the widening of the M25 motorway and the rebuilding of Blackfriars rail station, warned that these problems would knock £50m from its expected 2013 operating profit. The profit warning prompted analysts at Bank of America Merrill Lynch, Balfour Beatty's house broker, to lower its full-year operating profit guidance from £255m-£260m to £205m-£210m. In 2012, the construction and infrastructure group reported operating profit of £310m from revenues of £10.9bn. Market conditions that deteriorated significantly in the second half of 2012 continue to be difficult. Change in procurement trends, which we have previously highlighted, have persisted, allowing customers to impose increasingly stringent conditions on to contractors," the company said. The profit warning is Balfour Beatty's second in six months, after a dismal trading update in November sent its shares down 18 per cent in a single day. Balfour Beatty also cautioned on Monday that poor trading conditions at its rail division would knock £10m from the group's full-year bottom line, but said this would be offset by stronger trading at its US, Asia and Middle East professional services business. We view this is somewhat disappointing given comments from peers such as Kier Group that UK construction markets had not worsened over the past six months. It will cast a negative shadow over most of the sector today, but we think a lot of this is Balfour specific, being slow to react to these trends," said analysts at Oriel Securities. Last month, Balfour Beatty confirmed that it was planning to sell most of its European businesses as uncertainty in the eurozone continued to weigh on the building industry. The construction company, which built the London Aquatics Centre, has already sold its Spanish business to management.