1st Feb 2016 08:21
LONDON (Alliance News) - Asset and energy support services company Lakehouse PLC plunged on Monday morning after the group said budget cuts within its housing association clients have resulted in it winning fewer contracts than expected.
Lakehouse shares were down 53% to 39.82 pence in early trade, the worst performer in the FTSE All-Share.
The company said it has seen good bidding success since the start of its financial year on October 1, but said it is currently operating in a backdrop of active cost reductions taking place across its housing association clients, in particular a requirement for social landlords to cut rents by 1.0% a year for the next four years.
In some cases, Lakehouse said, this is resulting in client spending commitments being held back until budgets are confirmed in April, which has meant the number of contracts it has been able to secure has failed to meet its expectations, hitting its Regeneration unit the hardest and forcing the group to trim its expectations for the division.
Energy Services, Compliance and Construction division revenues have remained in line, albeit with selective bidding in the construction arm, but the group said the problems in its Regeneration unit will hit its results for the full year, which will mean profit will fall year-on-year.
By Sam Unsted; [email protected]; @SamUAtAlliance
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