The group said it has increasingly been affected by the previously reported challenges in rail and in the Middle East.

The business has also been hit by a reduction in demand for consulting services generally, as well as by the costs associated with targeting new opportunities and investing in developing its major local authority partnerships,
 
"In spite of this, and notwithstanding general economic pressures, demand for the group's services in our core markets remains generally good," Mouchel said.

"Although general economic conditions remain challenging, our focus on the UK public sector and on the provision of essential services and the management of vital infrastructure means that the demand for our services remains generally buoyant, as evidenced by our continuing strong order book and bidding pipeline. We remain confident about our long term prospects."