黑洞社区

Mouchel鈥檚 underlying profit will fall for at least another year, analysts predict, after it recorded a 拢14.7m pre-tax loss.

Last week the company scrapped its dividend, after which its share price dived by more than a third amid fears that it would be heavily exposed to cuts in UK public sector work.

鈥淚t鈥檚 getting towards being a 100% UK business and 100% public sector,鈥� said analyst Chris Banbury at KBC Peel Hunt.

Mouchel鈥檚 underlying profit of 拢30.5m this year was wiped out by redundancy costs and write-downs in the Middle East.

Banbury predicted that it would shrink further next year to 拢28.4m, and not recover to 2010 levels until after 2012.In results announced last Friday the firm revealed that 拢45.2m of exceptional items had turned the underlying 拢30.5m profit into a 拢14.7m loss in the year to 31 July. Revenue fell by 15% to 拢632.6m.

Tony Williams, an analyst at 黑洞社区 Value, said because almost half the firm鈥檚 profits came from the highways sector, the 拢1.3bn of cuts and delays to road schemes announced last week would suppress profits for the next two years.

鈥淎s the Highways Agency expenditure begins to bite, it will have an impact. 2012 is going to be even tougher [than 2011],鈥� he said.

The company laid off about 2,000 staff last year, which racked up 拢22m in redundancy costs. Andrew Brown, an analyst at Panmure Gordon, said the completion of this process meant that the consultant was facing lower exceptional costs next year, but it could not afford another big round of redundancies.

鈥淧rofessional people are expensive to get rid of, which accounted for much of last year鈥檚 cost. Next year the exceptional items should be much lower. But the profit prospects for the next six months remain muted.

鈥淚f they are having to cut staff on an annual basis, then either they are in the wrong business or they are overstaffed,鈥� he said.