(Reuters) - A profit warning from Britain's Mitie Group (LON:MTO) Plc sent shares in the outsourced services provider down by 25 percent on Monday.
The company lowered its full-year operating profit outlook citing a reduction in higher margin project volumes and spending by clients in the wake of Britain's vote to leave the European Union.
It warned that first-half operating profit would be "very significantly" lower while revenue would be modestly lower.
Shares in the company, whose healthcare services range from home care for the elderly to hospital cleaning, were down 25 percent at 201 pence at 0745 GMT and on track for their largest fall since 1987.
Mitie pointed towards a slowdown in healthcare as well as in its property management unit which offers services ranging from interior installation to maintenance.
Some property project programmes had been delayed this year, the company said, as social housing rent reductions that came into effect in April and budgetary pressures faced by local authorities had reduced funding available for repairs, maintenance and projects.
Mitie said economic conditions in Britain were being impacted by lower growth rates, changes to labour legislation, public sector budget constraints and uncertainty about how Britain will negotiate its exit from the European Union.
"We are finding that the recent economic uncertainty is currently driving clients to renew or extend larger contracts with existing suppliers including Mitie, a trend we have seen over the last 18 months, and to defer investment decisions," the company said in a statement.
Liberum analysts cut their Mitie full-year earnings per share guidance by 8 percent, saying that management was guiding towards a 10-20 percent fall in core earnings.
The brokerage said Mitie's warning was also negative news for rivals Carillion Plc (LON:CLLN) and Interserve (LON:IRV) Plc.
Mitie said it was reviewing its options regarding its healthcare business, as trading conditions in the sector remained challenging.
Mitie peer Mears Group Plc has already indicated its intention to exit "unsustainable" care contracts.