Balfour Beatty said it will not be paying an annual dividend to shareholders after it capped a troubled 2014 with a reported loss of £59 million on a turnover of £8.4 billion.

The loss, which follows a pre-tax profit of £185m the previous year, was not aided by a total trading loss of £319m by the firm’s UK construction division.

Group chief executive Leo Quinn has now launched a major cost-cutting drive designed to save £100m in overheads.

The cuts are part of Quinn’s “Build to Last” turnaround programme which is being rolled out over the next 24 months.

Mr Quinn said: “Balfour Beatty is a global name built on the exceptional engineering skills of its people. This strength is evidenced by the continuing flow of landmark contracts across the Group. The business model also balances Construction Services and Support Services with a successful Investments business which will continue to create significant value.

“Over the next two years we should work through the severe legacy of ‘problem’ construction projects. However, in tackling the cultural change required to ensure these issues are behind us, we face major short-term challenges. The key is that we are determined to address this through self-help. Our transformation programme, Build to Last, is gaining rapid traction and we are driving initial improvements of £200m cash in, £100m cost out over 24 months. In addition, our Investments portfolio will provide the financial flexibility of both reliable income and the sale of maturing assets into a strong market.

“To maintain balance sheet strength throughout this period, we have already cancelled the share buyback and re-phased our pension fund payments with the support of the trustee. We have also decided not to recommend a final dividend this year, but expect to reinstate the dividend at an appropriate level by March 2016.

“I remain convinced that all our operations can achieve industry-standard performance as markets improve. The real prize is a sustainable return to profitable growth, built on the Group’s unique capabilities, underpinned by leaner, stronger processes and flawless execution. Longer term we believe that as a leader in its core markets Balfour Beatty should be able to deliver superior returns to the benefit of its customers, employees and shareholders.”

Balfour Beatty’s loses for 2014, a year which saw the company issue several profit warnings, would have amounted to £304m were it not for the sale of its US construction business Parsons Brinckerhoff. Balfour sold the business for £753m in October last year making a profit on the sale of £234m.

In May last year chief executive Andrew McNaughton resigned after the firm issued its third profit warning that year.

Balfour then rejected numerous takeover attempts from rival Carillion.

In January, the firm said it had cancelled a proposed £200m share buyback and said it was reviewing its dividend policy.