Severfield-Rowen plc (LSE:SFR) shares plunged 41% in early trading after the structural steel group warned that tough market conditions in the UK and Europe had hit profits.
The company said pricing pressures had lasted longer than expected, while project cancellations and delays - including a major contract pushed into next year - had reduced its workload.
Despite efforts to offset these challenges through cost-cutting and securing new contracts, Severfield now expects annual pre-tax profit to come in between £18 million and £20 million, significantly below previous estimates.
The company has also cancelled its share buyback programme to preserve cash. Net debt stood at £55m at the end of January, with full-year debt expected to range between £45 million and £50 million.
Severfield warned that uncertainty over client decision-making and the lack of large anchor projects would impact next year’s performance, though it remains optimistic about securing major contracts in sectors such as data centres and commercial offices in the longer term.
The stock tumbled 19.7p to 28p at the open.