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10 September 2012 | Anna Reynolds
Continued problems with two long-term public sector contracts will “significantly” affect profit expectations for the year at infrastructure and services group May Gurney.
The company said it was working with two of its local authority clients to take “stringent actions” to drive operational efficiencies and profitability and bring the two refuse and recycling contracts back in line with predictions.
CEO Philip Fellowes-Prynne has left the company with immediate effect and has been temporarily replaced by non-executive director Willie MacDiarmid.
The group has also been affected by the cancellation of a £91 million Building Schools for the Future contract, scrapped by the government in 2010. The company’s facilities services business is being closed, resulting in high costs contributing to a £10 million loss.
The company has also cut revenue forecasts in its Scottish utilities business after Scotia Gas Networks, with whom May Gurney has had several large-scale projects, announced plans to reduce its outsourcing.
But the company has won £86 million of new work, as well as £50 million in contract extensions, since April 2012.