STRUGGLING Mowlem announced more bad news this week when it admitted profits for 2005 would be £20 million less than first thought.
The firm said an ongoing review of its current contracts meant it had scaled back this year's pre-tax profits forecast to just £8 million. City analysts had been expecting around £28 million.
In Tuesday's profits warning the firm said: 'This reduction relates to a range of contracts across the group, with around two-thirds of the impact in the UK and Australian construction activities.'
In 2004, accounting black holes, an exceptional charge and other one-off costs saw Mowlem plunge to a £15.3 million loss from a £45 million profit the previous year.
Chief executive Simon Vivian is close to completing a £6 million restructuring of its construction division.
This is expected to save the firm £5 million a year.
In its statement, the firm added: 'Mowlem is reviewing its approach to profit recognition and contract valuation.This review is a major undertaking on which the board expects to have made substantial progress by September.'
The firm's next set of results, for the six months to the end of June, are expected to be unveiled on September 22.