Estate agents Sherry FitzGerald have warned that profits for 2001 are likely to fall substantially short of expectations due to the slowdown in the property market.

The announcement knocked 10 cents of the value of the firm's shares, which closed at 95 cents.

The company said it expects profits after tax and minority interests, and including exceptional items, will be around €600,000 (£472,500). This compares to an after-tax attributable profit of €1.69 million for the first half of the year, indicating Sherry FitzGerald made a loss of over €1 million for the second half of 2001. The group said the economic downturn, coupled with a loss of consumer confidence in the residential market, had negatively affected its trading position.

"This was further compounded by the tragic events of September 11th, which shattered any expectations of an early recovery in the global economy. Commercial transaction numbers, which had already moderated due to the slowdown in the ICT sector, have slowed further," the company said in a statement.

Sherry FitzGerald also incurred a one-off cost €500,000 as part of the restructuring programme. That restructuring, which saw it shave 25 per cent of costs, resulted in the group reducing staff numbers from 269 to 235.

The company said it would continue to concentrate on bringing its cost structure in line with the economic environment, although it is understood that no further job cuts are expected.

As part of the restructuring, the group disposed of a property which has realised an exceptional gain of approximately €750,000.

The company said market conditions, particularly those affecting the commercial business, would remain challenging.