Listed materials firm will dispose of assets and may ask shareholders for cash

Materials firm Ennstone is to undergo emergency cost-cutting measures after being badly hit by the sharp downturn in the UK economy.

In a gloomy trading update, the listed firm said it will dispose of surplus assets and is considering equity fund-raising from its shareholders.

Ennstone said it is likely to be “substantially behind” present market forecasts at the year's end, with no likely improvement in sight in the UK economy.

The group said that its English business, Ennstone Johnson, has been particularly badly affected, while its Scottish arm has been further hit by severe weather.

The company had already announced in its interim results its intent to sell the US division, and has now said it is in exclusive discussions with a single party to sell its Pennsylvania-based wing.

Ennstone said it is exploring selling off further assets and will pursue additional financing, but did not say whether the cost cutting will include a headcount reduction.