Presenting its full 2019 results this morning, the contractor said the gas market is no longer considered viable to the group as under-performing historic contracts forced an impairment charge of £58 million.

Exiting the market will continue Balfour’s strategy of focusing on lower-risk work to boost margins, it added.

The contractor said: “Balfour Beatty has taken the decision to further de-risk the business by not re-bidding gas contracts under RIIO-GD2, since the terms and conditions do not meet the Group’s minimum expectations.

“This has resulted in a non-cash non-underlying goodwill impairment of £58m.

“The gas market is no longer considered viable to the group because of the unfavourable working capital and onerous terms and conditions.”

The firm also confirmed that the final cost of the AWPR has exceeded £1 billion, more than double the initial budget.

Presenting the results to analysts this morning, Leo Quinn, Balfour Beatty group chief executive, said: “It was a PPP, which was sold for £533m and, I think, delivered for £1.2bn.”

Balfour Beatty increased pre-tax profit to £138m (2018: £123m), as revenue topped £8bn and the forward order book now sits at £14.3bn.

Mr Quinn said his Build to Last turnaround programme is continuing to bear fruit.

He added: “Five years into our Build to Last transformation programme, we continue to drive a culture of transparency, risk management and relentless improvement. Having focused Balfour Beatty’s geographic and operational footprint, we have invested significantly in capability, innovation and standard systems and processes. In this way we have created a scalable business which – together with the increasing order book – gives us confidence that the group will continue to deliver profitable managed growth and cash generation on a sustainable basis.

“We are committed to delivering value from this performance. The group is continuing to pay down around £150 million of borrowings in 2020 and in addition, the board will review Balfour Beatty’s capital structure once there is clearer understanding of the COVID-19 situation.”