Mouchel has warned that its profit before tax and exceptional items will drop to £30.5m from £40m for the year ended 31 July 2010.

In a trading update last week the consultant said: “Taking into account the challenging business environment and the likelihood that this may harden, the group has decided to take a cautious view of the final settlement of a number of project claims.”Since January 2009 the firm has reduced its head count by more than 2,000 and expects to make a one-off payment of about £23m to cover this, which will be taken as an exceptional charge.

The group’s year-end net bank borrowings stood at £83.5m and it is in discussions with its banks on the refinancing of its loan facilities.Its preliminary results will be announced on 28 October.