Finance director Gerry Brown said that Barclay Mowlem, its Australian subsidiary, has scaled back its work in New South Wales from a turnover of £350m to £200m. The company has only one more problem contract left, and has revised its pricing on project pitches to reflect the increasing labour and skilled trade costs.
Brown added: "We are pulling the New South Wales work back to a level where we feel more comfortable. We have been avoiding work for some time."
A company spokesperson said: "We will take a deep breath and wait until the water cools down."
The announcement led to a fall in the company's share price. This dropped 19% last week to close at 165.25p. The company's share price fell a further 0.75p on Monday.
Analysts also revised their forecasts for the company. Arbuthnot, an investment bank, estimated that Mowlem's pre-tax profit figure in its interim results would now be £24m, rather than its original prediction of £36m. Arbuthnot also expressed concerns that the firm's Australian problems would distract the company from its other business.