Shopfitter Styles & Wood has unveiled a catastrophic drop in profits for 2008 as it was hit by a combination of cancelled and scaled-down retail contracts and substantial restructuring costs. Profits for the year to December 31 were £3.8m , down more than two thirds from £11.8m in the previous year.

On Friday, the firm revealed a refinancing package that will deliver £10m of new cash for the business with a further £2.25m in shares to be offered on the market.

Chief executive Ivan McKeever explained that that the package would clear the company’s debts. “We’ve worked really hard on our margins. The most important thing for us has been keeping our customers. Raising capital rather than sacrificing margin has been integral to this,” he said.

Styles and Wood blamed the economic climate for the profit crash stating that many orders had been cancelled or reduced as cash-strapped retailers opted to mothball existing projects.

The company has been anxious to expand its customer base to reduce the impact of the downturn and is looking to step up its international activities, particularly in the Middle East.

The city judged the results harshly. Its share price fell by over 40 per cent on Friday.