The owner of Allied Pickfords removals and Exel Logistics said that weakness in several markets would put the brakes on its UK operations.
Gerry Murphy, the chief executive, said NFC's outsourcing activities would suffer from the slump in manufacturing, with automotive and chemicals operations particularly affected. The downturn in the housing market would squeeze Pickfords' personal moving business.
Mr Murphy said NFC was partly insulated from economic vagaries as around one-third of its logistics contracts were long-term. However, the rest were tied to client performance and would reduce earnings if the economy deteriorated.
The bearish statement triggered profit downgrades for 1999 from about pounds 114m to pounds 108m. The shares fell 3p to 117p. The news overshadowed 1998 results in line with expectations: pre-tax profit rose 9 per cent to pounds 126.1m on turnover down 3 per cent to pounds 2.3bn.
Analysts noted that the company was vulnerable to a UK slump as Britain accounts for over 60 per cent of earnings, and strong growth in US business would not be enough to offset a UK slowdown. NFC's troubled European operations are only expected to break even in 1999.
Peter Bergius at ABN Amro rates the shares, trading on 10 times 1999 earnings, a hold. Other experts concede that NFC is in good shape to weather a downturn after restructuring, but say there is little upside for the shares.Reuse content