In a statement this morning Kier said it is now reducing its expectations for sales for the year ended June 2008.
Conditions for its property business have also continued to deteriorate over the last few months with yields shifting upwards and a slowdown in occupier demand.
The firm said: “The profits arising from our housing business continue to form a progressively smaller proportion of overall group profits before tax. We continue to review and adjust our cost base in line without reduced level of trading.”
Despite the downward trend of the housing market Kier said its construction division has performed strongly reaching record levels of cash and order books.
Its regional division was boosted by being selected by BAA to be one of its five regional framework contractors who will deliver projects totalling £650 million.
Kier said: “Barring any further significant market setbacks for our residential business overall profit before tax for this year is anticipated to be in line with expectations, our balance sheet is strong and our cash balances remain high.”