Shares in the engineer Redhall Group crashed 21 per cent yesterday after it issued a profits warning due to problems with its £20m deal to make blast-proof doors for the building housing Britain's nuclear warheads.
Last February, Redhall was awarded the four-year contract to design, manufacture and install the 10-tonne doors and frames for the Atomic Weapons Establishment, which looks after the UK's Trident nuclear weapons. At the time, the company said: "This award demonstrates Redhall's growing reputation for delivering specialist turnkey engineering projects in demanding nuclear and defence arenas."
But difficulties with a subcontractor providing the door frames has caused delays and pushed up costs, meaning second-half profits would be "materially below" expectations.
The news saw Redhall's share price plunge 22p to 81.5p. Analysts cut expectations for 2012 revenues by £4m to £118m and profits by £1.5m to £4m. But they were not put off the stock. David Buxton at FinnCap said: "While the shares may react negatively today, we believe this problem is only a short-term issue. There is good underlying value."