Consultant Mouchel is expecting its full year results for the year ended 31 July 2010, to be at the lower end of expectations given the uncertainty over future workloads in the public sector.
In a trading statement released today the company said: “Trading remains challenging in some areas given the uncertainty that exists in many public sector markets. We expect this situation to continue until the government’s announcement of the Spending Review on 20 October 2010 and probably for some months thereafter, as we work with our clients to help them respond to the changing environment.”
Despite the short term uncertainty, Mouchel said it was increasingly confident that the government’s target of reducing budgets by at least 25 per cent over the next four years would create more opportunities for firms like itself in 2011 and beyond.
The company said it had secured £650 million of new contracts in the last year and at 31 July its order book and bidding pipeline stood at £1.8 billion and £2.2bn respectively.
Mouchel said it had completed the major part of its cost reduction exercise, which it said will result in full year savings of at least £20m.
With net bank debt at £90m, the firm said it was well within its banking covenants but it is not forecasting the collection of Dubai contract receivables in the short term.