Essex-based contractor Lakehouse has issued a profit warning in its latest trading statement.

The firm it is operating 'against a backdrop of active cost reductions' due to a dip in spending by social landlord clients.

As a result, Lakehouse said this has led to 'slower than expected first quarter performance' in its Regeneration service and results in the group lowering its financial expectations.

In a statement, the contractor said: "In certain cases, client expenditure commitments are being held back until budgets are confirmed in April 2016. As such, despite our success in securing positions on key frameworks, including resecuring Eastern Procurement, the expected level of tenders from these frameworks has not materialised at the rate previously expected.

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"In Energy Services, we are securing revenues in line with our expectations, but the aforementioned funding pressures on social landlords mean that insulation contracts are having to be bid at lower margins.

"An important element of our strategy is the UK domestic smart meter roll-out programme, which has experienced a number of delays, leading the energy companies to delay procuring installations and we no longer expect to see any domestic smart metering work of note to take place by September 2016."

However, Lakehouse added its Compliance division is operating 'in line with management expectations" with each of its three recent acquisitions performing well.

"We continue our policy of bidding selectively in our Construction division and only pursue those projects that will deliver the appropriate balance of risk and overall returns for the year," the Group said.

"In light of the above headwinds the Group now expects the financial outturn for the current year to fall short of its previous expectations and to see a reduction on last year's profit level."

Stuart Black, Executive Chairman, added: "Following our successful maiden results as a public company, we have seen recently, a number of headwinds facing our markets come together to impact our business.

"I am confident that having built a Group with a range of services that allow us to help our clients address their operational and financial needs, we remain well placed to overcome these challenges."

(LM/CD)