Mouchel's troubles increased yesterday as its losses trebled, sending the shares plunging 27 per cent. The company that turned down a £330m bid last year is now worth close to £14m.
Yet analysts believe the services group will survive after it was handed a lifeline by its banks. Mouchel revealed it had agreed a plan to restructure its debts, which allowed it to avoid breaching its terms.
This came as the company announced its full-year losses had risen to £64.8m. It also warned it would "significantly reduce" its targets for next year. Richard Cuthbert resigned as chief executive in October, after a £4.2m accounting error emerged.
New head Grant Rumbles said: "Our results have been disappointing. The economic downturn and government steps to reduce public spending have continued to influence Mouchel's results this year."
Andy Brown, an analyst at Panmure Gordon, said: "The headline numbers are disappointing but, with a £1.4bn order book and new management, it looks like it can continue from here." It was encouraging that Mouchel managed to get the full year results out, he added.
VT Group attempted to buy Mouchel last year. Mouchel also rebuffed bids from Costain and Interserve.