Henderson Group (HGI), the company behind the £70 million plans to transform the former site of the Bank of England in Birmingham, saw shares nosedive after announcing a major profit warning.
The company announced yesterday that it would miss its pre-tax profit target of around £90 million for 2008 due to deteriorating market conditions.
Shares fell in early trading and never recovered, eventually closed down more than 18 per cent at 74.75p.
In a statement yesterday the firm said that since August, deteriorating market conditions had conspired against it.
“We have seen high levels of volatility as well as increased client activity. Hence, a number of the assumptions that underpin our stated goal, and which are beyond management’s control, are no longer valid, resulting in pressure on assets under management and fee income,” it said.
“For these reasons, we expect that group profit before tax and non-recurring items this year will be less than £90 million,” it added.
In light of the prevailing conditions, the group said it was taking action to protect its business and ensure that profits remained as high as possible.
It said it would update the market further in its interim management statement on November 6.
The company, part of the Birmingham Alliance consortium which built the Bullring, plans to convert the former BoE building at 55 Temple Row, opposite St Philip’s Cathedral, into a new Grade A office building with ground floor retail space.
The controversial British Land scheme was finally approved by Birmingham’s planning committee last week.
The proposals for the building, which lies at the heart of the Colmore Row Conservation Area, are considerably more conservative than those recently approved by the city council for the former Natwest Tower.