Lakehouse was forced to issue another profit warning this week with a further £4m of contract write-downs expected this year.
The company issued its last profit warning in May with a £2m provision against problem contracts.
On Tuesday it confirmed: “The Board remains focused on resolving performance issues in the Regeneration division. This includes a number of contract settlements on which there is a range of potential outcomes for the Group, both in terms of cash flow and impact on the Income Statement. Management anticipate there are likely to be further write-downs, during the current financial year as we seek to close out these issues with clients. Based on current discussions, this is expected to have an adverse impact of £4 million in the current financial year.”
Lakehouse also confirmed that the cost of its recent boardroom battle and management changes was £1.5m.
The company has managed to secure a £37m new deal with Scottish Power to install 450,000 smart meters in homes across Northern Scotland, Wales and North West England.
Bob Holt, Executive Chairman, said: “We are delighted to have secured this significant contract for our meter installation activities as well as significantly expanding our relationship with Scottish Power. This is an important award in helping to diversify our Energy Services division, reducing its current level of reliance on energy subsidies and particularly the Energy Company Obligation, a policy currently being consulted on by the UK Government. Elsewhere in the Group we are making progress and taking action on a number of operating challenges in the Group, especially on contract settlements within the Regeneration division. As previously reported, the Board remains very focused on restoring shareholder value.”
The company’s share price fell by more than 18% in early trading to 26.5p.
