In a trading update today the firm said it is selling off its surplus assets and is ‘actively considering an equity fund-raising.
Poor trading has put margins at the firm’s English business Ennstone Johnston under pressure and at its Scottish arm which has been affected by severe weather.
The firm will implement a series of cost reduction measures in the short to medium term.
Last month Ennstone revealed a pre-tax profit of £5.7 million in the six months to June compared with a £72,000 loss last time, when the business was hit by reorganisation costs at its US arm. But the firm had warned of continuing difficult trading conditions in the US and the UK house building markets.
Continuing ‘highly volatile and challenging trading conditions’ have cause firm to cautious for the rest of the year ahead.
Ennstone also announced it intended to sell US assets to meet payments for its renegotiated bank facilities.
The firm said: “With no likely improvement in the trading environment, the board has concluded that the group is likely to be substantially behind current market forecasts for the year ended 31 December 2008.”