Contractor issues profit warning and plans to cut capacity in specialist building division as outlook 'deteriorates'

Contractor Renew Holdings has issued a profit warning and announced a second round of job cuts.

In a trading update released this morning, the firm said first half results were expected to be “satisfactory” but full year targets would be missed.

The board said: “Results for the first half of the year are expected to be satisfactory, however the outlook has deteriorated and as a result the board does not now expect the group's results to meet full year market expectations.

“In specialist building, the last two months have been challenging, with project cancellations and deferrals leading to reduced trading expectations for the second half of this financial year.”

It said it would cut margins and reduce capacity by 23% in its specialist building division following a “challenging” two months. The division already downsized by 14% late last year. The cost reductions will be phased through the second half of the year, it said.

In a statement to the stock market, Renew said redundancies and other restructuring costs would result in a second-half exceptional charge of £2.5m.

It said its specialist engineering business was stable and is expected to represent around 40% of group revenues going forward.