Nestor, the listed healthcare recruitment firm, has announced that is does not expect to hit market expectations.

Profits will increase next year, but not to the extent the market expects, said chief executive Justin Jewitt in an announcement to the London Stock Exchange.

The firm has had difficulty with a contract to an NHS trust, which the company expects will damage its chances of securing similar contracts.

New pricing structures under the NHS's new regional framework agreements have reduced margins and have reduced volumes.

The board will now focus on the homecare market and expects to benefit from increased demand for locums for Primary Care Trusts.