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Infrastructure giant, Mouchel, has stunned the City by reporting that its performance had not met target forecasts. Its share price plunged 64.75 points or 27.70% to 169p after the firm revealed it would not meet targets for this year or next. Contracts linked to the Middle East and the rail industry had failed to deliver. The results were only saved by its core public sector contracts in the UK. Mouchel's order book remains solid, with 75% of its new year business already contracted out. Chief executive, Richard Cuthbert, said: ‘Our ability to transform public service delivery in very practical ways is one that we're exploiting to the full on our existing managed services contracts.' Mr Cuthbert said he would continue the company's ‘strategic focus' on the public sector, and said he was confident in the capacity of the market to sustain its plans to ‘drive out further efficiencies' in public service provision. But one of the firm's key rivals revealed better results to the Square Mile. Atkins's outlook for the new financial year is positive, with no planned job cuts and 54% of its turnover for the year already having been contracted. It estimates pre-tax profits at £100m and – with £234m cash on its books – is likely to see more business come in from large organisations as the recession tightens. However, with two-thirds of its business coming from the public sector, investors will be getting nervous of expected cuts in public spending over the next couple of year. This is likely to mean prices for council contracts will not see significant rises. City analysts predicted the full effects of the recession had yet to hit the sector.

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BUSINESS

Shares hit as Mouchel fails to reach targets

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