M&E contractor tells City it is unlikely to meet market expectations and plans sale or closure of two regional arms
Listed M&E contractor T Clarke revealed today that its UK managing director is to step down, as it issued a profit warning to the City on “turbulent” market conditions.
The firm, which is electrical contractor on the London Olympics stadium, is also to close or sell two of its smaller regional businesses in response to the fall in revenue.
In a trading update, the contractor said “a strategic review of the group's operations has recently been carried out and as a result the board does not expect to meet current market expectations for the year”.
Barry DeFalco, managing director of UK operations, will leave the company on 30 September “as part of the restructuring”. The company said it was also expecting to make “a number” of redundancies across the group, and had made an undisclosed provision for writing off bad debts.
The news comes despite T Clarke reporting in May that it was optimistic there were signs of life returning to the commercial sector.
Today it said it had a forward order book of £170m, compared with £175m in May. The firm reported that regional operations in Scotland, Newcastle, Leeds and Derby were trading well and that it had cash balances of £24m.
The update said the firm was expecting to retain the shareholder dividend at the current level and that it was considering a share buy-back scheme because of the underlying “strong financial position” of the group.
It said: “Despite the difficult market conditions, the board remains confident that the group will come through the current turbulent trading environment and that the underlying business is strong.”