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Nomad Building Solutions Limited (NOD) shares slumped 44% Monday morning after the modular building manufacturer downgraded its FY10 guidance from a profit of $10 - $12 million to a $2 million loss. The company said it had been negatively impacted by a failure to secure the anticipated level of work, additional costs and continuing pressure on margins.

Nomad said it has continued to suffer from difficulties in closing out the last of the modular building supply and install contracts for resource project camps it won in the previous economic boom.

“Poor systems and management have resulted in past installation contracts proving to be financially problematic for Nomad, but the last of these contracts is now reaching practical completion,” the company said.

Nomad has forecast a loss for the six months ending 31 December 2009 of about $5 million on revenue of approximately $100 million.

”The $4 million reduction in the net result for the first half of FY10 compared with the October guidance arises from recognising additional costs to complete the modular building install projects in the Rapley Wilkinson division,” the company said.

Nomad said it had initiated discussion with its bank regarding the revised outlook despite its cash flow forecasts indicating it would remain within its available facility limits.

The company added that delays in clients awarding new work has deferred the timing of forecast revenue and earnings in all of Nomad’s trading divisions.

“Nomad has also been unsuccessful in a competitive environment to win a number of contracts that were factored into Nomad’s October 2009 forecast,” the company said.

”As a consequence, work levels are now expected to be lower in the second half of FY10 than were previously anticipated.”

Nomad said it intends to make a further announcement on Wednesday, 13 January 2010 following a Board Meeting to be held on 12 January regarding the actions required to address areas of unsatisfactory performance.

As at 1055 AEDT, Nomad shares were down 29.5c to 41c.

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