The outsourcing firm Mouchel warned on its profits outlook yesterday after taking a "more cautious view" of what it expects to earn from public-sector contracts as the Government prepares for spending cuts.
Shares in the company, which develops roads, schools, water and energy supplies for local councils and government agencies, fell 13 per cent to 135p after it said profits before exceptionals will be about £30.5m, against expectations of £35m.
A spokesman said that Mouchel had taken a more cautious approach to what debts it expects to recover and what profits it will make from certain contracts in the challenging environment.
But the group said that with an order book of £2bn, it remained confident over its medium to long-term outlook. It also expects forthcoming government cuts to create further opportunities, as more services will be outsourced to the private sector.