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Balfour Beatty鈥檚 Construction Services division has reported deepening losses in the first half of 2014 as the group as a whole broke even.

The Construction Services division reported an operating loss from continuing operations of 拢69m in the six months to 27 June, down from a loss of 拢39m over the same period last year.

The firm said that the loss was largely due to the operational issues in its engineering services business, which it warned the City about in May, and 鈥渢o a lesser extent, the UK major building projects business鈥�. It said trading remained in line with its most recent trading updates.

It added that the UK construction services order book had fallen 11% 鈥渓argely due鈥� to more 鈥渟electivity in bidding activity鈥� and 鈥渞educed order intake鈥� in its engineering services business.

The firm said it had 鈥渟trengthened鈥� the management control in the engineering services business and was 鈥渋mproving transparency鈥� and introducing 鈥済reater scrutiny of contract positions鈥�.

It added: 鈥淭he problem contracts are being stabilised, with the majority of the loss making contracts due to complete in 2014. Whilst short term risks still remain, we continue to pursue contractual entitlement.鈥�

Balfour Beatty said its regional UK construction business was experiencing 鈥渋mproved margins鈥� but that this was 鈥渇rom a low base鈥� and would 鈥渢ake time to feed through into profitability鈥�.

But it added that it had reduced the number of unprofitable business units and expected all its regional businesses to be profitable by January 2015.

However, it said its UK major building projects construction business experienced 鈥渇urther cost increases of approximately 拢10m and delays during the first half [of the year]鈥�.

The firm鈥檚 UK major infrastructure projects arm, also part of the construction business, reported that its order book was 6% up on this time last year.

The firm said that it had reduced overheads across its construction business by 拢40m but it added that 鈥渁s revenues have also declined over that period, overall overheads have remained above 6%鈥�.

However, the group reported a return to pre-tax profit from continuing operations of 拢1m in the first half of the year on revenue of 拢4.85bn, up from a 拢4m pre-tax loss from continuing operations over the same period last year.

Balfour Beatty Group reported a fall in revenue of 2%, down from 拢4.96bn.

It also reported that its order book had fallen slightly to 拢13bn on 27 June, down 1% from the beginning of the year.

The firm鈥檚 support services business reported a 5% fall in revenue from continuing operations to 拢615m in the first half of 2014, down from 拢648m in the first half of 2013. But the division鈥檚 operating profit from continuing operations before exceptional items increased to 拢22m in 2014, up from 拢17m in 2013.

Balfour Beatty鈥檚 infrastructure investment divisions reported an increase in operation profit before exceptional items to 拢72m, up from 拢63m. The firm said the increase was driven by disposal gains of 拢51m and 鈥渞evisions to expected lifecycle and other operating costs within the PPP investment portfolio鈥�.

Balfour Beatty also updated the City on the sale of Parsons Brinckerhoff. It said that round three bids were 鈥渆xpected very shortly鈥� and there was 鈥渟trong competitive interest鈥�.

It said it expected to return up to 拢200m from the sale to shareholders.