SHARES in infrastructure services group Mouchel slumped more than 30 per cent yesterday after it plunged to a £64.8m annual pre-tax loss and said it paid high fees to refinance its debt for the second time.
Mouchel, which provides traffic systems for roads and detects leaks in water pipes, blamed lower public spending and the need to defend itself from a takeover at the start of the year for an 84 per cent plunge in underlying pre-tax profit to £5m.
The firm also said it had agreed new terms for its £180m debts to prevent it from breaching the loan terms, but would pay extra fees of up to £10.25m, plus pay higher interest and give warrants for five per cent of its share capital over to its lenders.
Grant Rumbles, the chief executive appointed just six weeks ago, called the results “disappointing”.
“The economic downturn and government steps to reduce public spending have continued to influence Mouchel’s results this year,” he said, adding that he would be “reviewing every aspect of our business” and “looking aggressively at our cost base and particularly at our supporting functions and central overheads” to improve performance.
But he conceded that parts of the business “have underperformed, notably management consulting”.
All Mouchel’s business divisions posted double digit falls in profitability as its group revenues fell 15 per cent to £540m.
Mouchel’s shares soared to a high of 154.8p in March as it battled takeover bids from rivals Interserve and Costain, but have slumped to just 12.25p yesterday as performance plummeted.