Fountains says that its customers aren’t increasing their orders as expected.
The forestry services and grounds maintenance business had thought that work levels would improve following a lack of demand earlier in the year. There is still less money being spent on clearing vegetation by rail, road and utilities customers.
That means that full year turnover to September 2008 will be well below expectations. Costs are being cut but the company is unlikely to do any better than break even for the year as a whole.
The shares slumped 30p to 78p, valuing Fountains at £11.7m. Fountains joined Aim in December 1996 at a placing price of 75p.
The company points out that it hasn’t lost any customers and it is negotiating additional work. One of Fountains’ problems has been its inconsistency.
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