Social housing maintenance and homecare provider Mears said its full year profit would be below expectations as a result of writing off costs relating to its solar panel installation business.
The company, which carries out essential repair work on hundreds of thousands of homes owned by local authorities and housing associations, said on Thursday it had decided to close down its solar panel business as a result of Britain's decision to halve subsidies for such ventures.
Mears said, as a direct result, its full year operating profit would be 2.8 million pounds short of its previous expectation.
The government plans to halve state subsidies for solar panel schemes of up to 50 kilowatts (kW) and to impose minimum energy efficiency standards on buildings applying for solar Photovoltaic (PV) feed-in tariffs.
Whilst PV forms a very small part of our social housing activities, the government's recent proposals to reduced the PV feed in tariff are disappointing, said Mears Chief Executive David Miles.
Whilst I still consider the group to be extremely well placed to benefit from the opportunities relating to fuel poverty, it is unfortunate that we have wasted both time and resource in this area over the past six months, he added.
The company said it had continued to experience solid trading within its core social housing and domiciliary care divisions, with its order book standing at 2.7 billion pounds.
Looking forward, Mears said its bid pipeline stands in excess of 3 billion pounds.
Mears also said on Thursday its social housing business had been awarded new contracts worth 109 million pounds, bringing its total new contracts awarded in the last eight months to 350 million pounds.
The average forecast for Mears' full-year pretax profit had stood at 34.1 million pounds, according to a Thomson Reuters I/B/E/S poll of 8 analysts.
Mears also said it had completed a refinancing of its banking facilities and signed a new 120 million pounds unsecured facility maturing in July 2016.
(Reporting by Matt Scuffham; Editing by Neil Maidment)