Impellam to lose an extra 9.8m pounds on subsidiary contract

20th Feb 2014 10:53

AIM-listed Impellam group warned it would make operating losses of up to 9.8m pounds over the life of a contract at its Carlisle Support Services subsidiary.The contract is one of two deals that were "operationally complex, badly priced and financially onerous", Impellam said in a statement. The company has already written off £13m on the two agreements.It has extracted itself from one of the contracts, but said it continued to experience "substantial operational challenges" with the second."Planned re-engineering and restructuring of the service due to be completed at the end of the first quarter this year are proving difficult to finalise," the company said."Negotiations in respect of a range of options, including exit of the contract, are ongoing."Impellam said it will release full year results, to be released and the end of February, and, excluding exceptional items, will be in line with the trading statement released in December which stated adjusted operating profit would be about £5m lower than 2012.A final dividend of 7p per share will be recommended, the company said.Impellam shares were down 28.5p to 362.5p at 11.30.FP