Outsourcer Mouchel yesterday warned full-year profit would be lower than expected after it said it was more cautious about the settlement of some projects amid a harsh business environment.
The company, which provides maintenance for highways and handles local government payrolls, said pre-tax profit before exceptionals for the year would be £30.5m. Analysts were, on average, expecting £34.85m.
“Taking into account the challenging business environment and the likelihood that this environment may harden, the group has decided to make a more cautious view of the final settlement of a number of current project claims,” Mouchel said in a surprise trading statement ahead of results on 28 October.
In August, the company said full-year results would be at the lower end of expectations as a lack of visibility over government austerity measures created a difficult trading environment. Many support services firms are suffering as the coalition government reduces spending to fight a ballooning national deficit, with big cuts expected to be announced in its spending review next week.
City A.M. Reporter