An independent probe into Balfour Beatty's finances is to result in the firm's UK construction profits taking a further hit of £70m.
The company confirmed the pain following a Sky News report on Wednesday night which said the results of the internal report, completed by auditors, would be released on Thursday following an emergency board meeting.
The firm had previously taken £135m in provisions related to its UK construction arm following a string of problems including cost over-runs, skills shortages and weak controls.
Balfour Beatty's statement said that KPMG's review meant that the board expected to reduce 2014 UK construction profits by £20m "relating to the difference between the reported contract positions."
The further £50m related to "an assessment of contract forecasts and subsequent deterioration in project performance up to the end of December 2014."
The Board was also to "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 full year results in March."
KPMG's investigation examined the company's focus on commercial controls, on 'cost to complete' and contract value forecasting and reporting at project level".
Balfour Beatty, which has a contract to help convert London's Olympic Stadium into a new home for West Ham United FC, has issued a string of cost alerts to the market in the last 18 months.
Chief executive Andrew McNaughton was replaced recently with former QinetiQ boss Leo Quinn while chairman Steve Marshall is expected to step aside soon.
Balfour confirmed today that to maintain a strong balance sheet, it was cancelling its planned share buy-back of up to £200m.
Mr Quinn said: "The summary report on UK Construction is an important step in drawing a line under a period of uncertainty for our customers, and enabling us to focusfully on delivering value.
"I was never in doubt that there was a great deal of work to be done to restore the Group to strength.
"Balfour Beatty is a large organisation which had become too complex and too devolved for adequate line of sight and financial control.
"The key is that these issues can be put right and we now have clear action plans in hand.
"Significant opportunity exists across the Group to drive reduced costs, improved profits and strong cash generation to the full benefit of our shareholders."
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