ISG warned yesterday that it expects to book another £10.5m in costs after problematic contracts forced the building services group to issue a shock profit warning in February.
In a trading update for the year to 30 June, the Aim-listed firm said it has set aside £5.5m to wind down its luxury construction services arm London Exclusive Residential and a further £5m to close its Kent office.
The news comes just four months after the company said the full-year profits would miss expectations by £7m due to “problems” on four contracts in its UK construction division.
ISG also made £17m of provisions for the two closures at the time of the profit warning.
The company said full-year results would be in line with already lowered forecasts and pointed out that trading at its fit-out business has been “excellent” as it sought to reassure investors.
The group sealed £80m of office fit-out projects in the last three months thanks to a surge in activity in the London and its regional office market.
These include a 70,000 sq ft project to fit out six floors for insurer Zurich’s new offices at 70 Mark Lane in the City.