Mouchel has warned that its profit before tax and exceptional items will drop to 拢30.5m from 拢40m for the year ended 31 July 2010.

In a trading update last week the consultant said: 鈥淭aking into account the challenging business environment and the likelihood that this may harden, the group has decided to take a cautious view of the final settlement of a number of project claims.鈥漇ince January 2009 the firm has reduced its head count by more than 2,000 and expects to make a one-off payment of about 拢23m to cover this, which will be taken as an exceptional charge.

The group鈥檚 year-end net bank borrowings stood at 拢83.5m and it is in discussions with its banks on the refinancing of its loan facilities.Its preliminary results will be announced on 28 October.

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