Mouchel shares plunge 30% as losses mount
Shares in outsourcing group Mouchel sunk more than 30% after it reported heavy losses and scrapped its dividend.
Mouchel, exposed to infrastructure spending by councils and government agencies, reported a £14.7m pre-tax loss, on revenues down 15% to £632m.
The company said it "has faced some challenges in recent times" and was restructuring to help reduce costs.
Shares in Mouchel, which this year rejected a takeover bid worth 294p a share, were 87p in afternoon trading.
Mouchel, whose operations include road maintenance and consultancy to local authorities, has already cut its headcount by more than 2,000 since the start of 2009.
The firm is in refinancing talks with its bank lenders, RBS, Lloyds and Barclays.
Richard Cuthbert, chief executive, said: "Trading in the current year has started more slowly than expected and the immediate outlook remains uncertain."
But he believes that pressure on the public sector to cut costs will lead to greater demand for private sector support, opening opportunities for partnerships and collaboration.
Mr Cuthbert said: "There is already evidence of more local authorities looking to outsource services to the private sector as they seek efficiencies, service improvements and reduced costs.
"Mouchel is in a good position to provide support as it has a large number of long-term, large-scale local authority bundled service partnership contracts," he said.
Mouchel was already hurt by the collapse of Dubai's property market and has made a costly exit from the emirate to concentrate on fast-growing neighbour Abu Dhabi.
At the start of 2010, Mouchel rejected takeover approaches from VT Group, which was subsequently bought by defence group Babcock.