Shares at fit-out business Havelock Europa spiralled yesterday as the firm issued a profits warning though no imminent jobs losses are expected as a result.

In a bleak trading update the Fife-based company warned that its profits for this year will “fall considerably below expectations” following delays in the commencement of work for key customers as well as lower than expected orders from the public sector.

The firm said this was “set against the previously announced backdrop of reduced activity in the first half” as well as the costs associated with putting in place a new business management system earlier this year.

Shares in the company, which closed at 10p on Wednesday, fell as low as 5.5p yesterday before recovering to close down 40% at 6p.

The news comes just three months after the company said it expected to meet its financial targets this year but follows a difficult period for the company.

In April, Havelock reported a return to the black with a pre-tax profit before exceptional items of £400,000 for 2016, compared with an £800,000 loss the previous year.

Like-for-like revenue jumped by about a fifth to £59.4 million, excluding the loss of business from a major financial services client – believed to be Lloyds Banking Group – announced in late 2015.

Total revenue for 2016 was £60.8m, down from £70.3m in the previous year when the major client contributed £21.1m.

Havelock also highlighted a major increase in public sector sales last year, especially in education.

At the time of the results, chairman Ian Godden said the first half would be “challenging” with orders slightly lower than last year.

Yesterday’s update said: “The directors of Havelock Europa PLC expect results for the year ending 31 December 2017 will fall considerably below expectations, due to delays in the commencement of work for key customers and lower-than-anticipated orders from the public sector. These developments are set against the previously announced backdrop of reduced activity in the first half and costs associated with the implementation of the enterprise resource planning system.”

A further update will be provided alongside its half-year results on September 27.