UK engineer issues profits warning

An engineering company responsible for wiring many of the UK’s best-known developments today warned that its profits would fall short of hopes.

T Clarke, which owns more than a dozen separately-branded businesses around the UK, blamed the expected results shortfall for 2006 on a number of factors, including slippages in the timing of certain projects.

Clarke said in August that its core operations were running at only 75% of capacity, adding today that further programme amendments to certain projects meant it was now necessary to make a number of redundancies. The figure for job losses is thought to be below 50.

Additionally, Clarke said it had identified issues in the management of some of its regional businesses, which caused it to review it expectations. The company said it had taken action to tackle the problems.

Profits will also be affected by costs of £400,000 (€53,200) incurred following an investigation by HM Revenue & Customs at Smith Contracting Services in Scotland, prior to it being bought by Clarke in January 2005.

As a result of all the matters, Clarke’s house broker Arbuthnot cut its pre-tax profits forecast for this year by £2m (€2.97m) to around £6.5m (€9.66m). Shares fell 7% today.

Clarke’s workload in recent years has included the London Stock Exchange, the London Eye and HSBC’s Canary Wharf offices.

It said today that medium term prospects for the group remained encouraging, with work in hand for 2007 and 2008 currently at around £150m (€222.96m).

Clarke said: “The directors are confident that the actions taken will enable the group to resume a more stable performance in 2007 and beyond.”

Analysts believe the build up to the Olympics in 2012 will offer a number of opportunities with major infrastructure projects due to start in 2008.