A significant proportion of the company's revenue comes from the middle east and Near East and the company said it expected these sources of income to be badly hit as clients delayed payments. It has therefore set aside 拢3m to take into account the firm's exposure. It also intends to cut overheads.
The company said: "As a consequence of the uncertainty, there may be increased risk of delays to collection of outstanding debts and stage payments." High-Point Rendel made a pre-tax profit of 拢3m on turnover of 拢27.1m for the year to 31 July 2000.
The news adds to the growing evidence that the construction industry will not escape the effects of the attacks on consumer and economic confidence.
High-Point Rendel's announcement comes after a warning from Skanska last week that its profit for the year is likely to be lower than last year because of a "deepening global economic slowdown".
There is also growing concern about the housing market (see Sharewatch below) and construction output is expected to be lower than first expected.
The Construction Products Association also disclosed this week that its third-quarter survey revealed that demand for its members' products had fallen since 11 September. CPA economics director Allan Wilen said there were also concerns that business confidence would deteriorate further.
He said: "There are fears that the flow of new private sector projects will weaken further as developers adopt a wait and see attitude."
