Pressure shares slump after results warning

Shares fell 27 per cent to 125p after the firm was hit by the downturn in the oil and gas market.

The Sheffield-based group said difficult trading conditions continued into the first quarter of 2016 and its operations that are dependent on the oil and gas industry have experienced a further, substantial decline in orders in the second quarter, complicated by unpredictable demand and very short lead times.

The group said it has continued to take measures to ensure it remains cash positive, including a further significant reduction in headcount.

The group is making a further 15 employees redundant, reducing the total headcount to 280.

It said that despite some recovery in oil prices, the outlook is for a slow recovery, particularly as oil inventories remain at historic highs.

It added that capital expenditure for oil exploration and production remains under pressure with further cuts possible this year and it anticipates the pick-up will be delayed into 2017.

Chief executive John Hayward said: “Whilst we continue to align costs to trading conditions, there is no escaping the effect the prolonged downturn is having and the difficulty in trying to call the bottom of this cyclical downturn.

“On the other hand, prospects for alternative energy remain positive, but the timing of contracts are a significant factor in determining the out-turn for the full-year.”