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Mouchel hit by public sector cuts

Engineering and outsourcing firm Mouchel has said a spending crackdown by public sector clients after the general election had put the squeeze on the business.

The company, which works with a host of local councils and organisations such as the Highways Agency, said the impact had been felt in “more discretionary” areas such as highways schemes and school building programmes.

The firm’s order book and bidding pipeline stood at £1.9bn and £2bn on 31 May respectively, compared with £2bn and £2.3bn at the end of March. Mouchel is monitoring another £1.5bn of potential tenders.

Shares in Mouchel fell as much as 10% at one stage as the firm predicted a “difficult” short-term outlook and launched its own cost-cutting drive.

“Demand for the group’s services, as we anticipated, has been affected by the measures taken by the new government to address the budget deficit and by the similar actions of some local authority clients,” it said.

The company, which had 11,100 staff as of July last year, refused to comment on how many jobs were under threat.

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