Support services group Amey suffered another blow on December 9, after warning that a string of one-off costs would dent final profits.

Shares slid seven per cent on the news, to 28p. A year ago Amey, based at Sutton Courtenay, near Abingdon, was worth 400p a share.

It said its bankers remained "supportive" although its debts are forecast to rise to £190-200m by the end of the year.

The group axed 300 jobs earlier this year following the share price crash.

Acting finance director Eric Tracey, who was seconded from accountancy firm Deloitte & Touche, has now completed a preliminary review.

Pre-tax profits are expected to be reduced to about £35m, compared to the £51.5m previously expected by analysts.

The cost of the redundancies, selling loss-making subsidiaries, and the sale of shares in private finance initiatives is likely to be £15m.

Mr Tracey said the group would probably write off £85m -- offset by a £20m tax credit -- because of the cost of the Croydon Tramlink project, the effect of the PFI equity disposal and other money it is owed. He said: "Year end net debt is now expected to be higher than previously anticipated due to a number of significant one-off items and the general commercial pressure which the group is experiencing."

"The actions determined by the board in the summer, following a strategic review, were designed to reduce the group's cost base and improve future cashflows.

"Good progress has been made on each of the initiatives taken."

Holes appeared in Amey's accounts after it changed the way it treated bidding costs, having spent large sums bidding for public-sector contracts to build and maintain roads, railways, hospitals and schools.

Amey is effectively selling its stake in the Tube Lines consortium, bidding to run part of the London Underground.

The Government has promised to protect bidders from any further delays caused by legal challenges from Mayor Ken Livingstone, who opposes privatisation.

Mr Tracey added: "The strong possibility of the London Underground PPP completing around the year end is also very positive, bringing to an end a long-running drain on the group's financial resources.

"The sales and profits of the group will be lower in the future as a result of the proposed disposals

"However, the implementation of the plans drawn up in the strategic review will enable the group to enter 2003 operating from a significantly lower cost base, with an improved focus on its core support services."

The change in accounting practice turned 2001 profits of £55m into losses of £18.3m.

When Amey last reported, its net debt stood at £142m.