Investor confidence in double-glazed windows maker Safestyle has been shattered after it dished out another profit warning and cancelled its dividend.
In a grim trading update, the AIM-listed company warned its 2018 profit would be ‘significantly’ below market expectations after losing business to an ‘aggressive new market entrant’, thought to be Safe Glaze.
Safestyle, which makes more than 6,000 window and door frames a week, first warned investors to expect lower profits last month as it reported a dip in full-year revenues.
The Bradford firm had planned to pay a 7.5p dividend to shareholders but has now decided to cancel it to preserve cash.
Safestyle, which makes more than 6,000 window and door frames a week, first warned investors to expect lower profits last month as it reported a dip in full-year revenues
Safestyle’s chairman Steve Halbert stepped down as it issued the profit warning. He has been replaced by non-executive director Peter Richardson.
In its trading update, Safestyle said: ‘The activities of this competitor have intensified and the group has taken longer to rebuild its order intake to the rate previously anticipated, and has also experienced cost increases as management takes the necessary actions to address these challenges.’
Shares in the business crashed 25.8 per cent, or 20.6p, to 59.4p.
The FTSE 100 ended the day up 0.42 per cent, or 30.7 points, at 7398.87 while the FTSE 250 was up 0.47 per cent, or 95.6 points, at 20316.37.
The market barely noticed the birth of the Duchess of Cambridge’s third child, if Mothercare’s share price is anything to go by.
The troubled retailer notched up gains of around 1.7 per cent shortly after the birth was announced, but fell back to end the day up just 0.1 per cent, or 0.02p, at 18.12p.
Stock Watch – Paragon Entertainment
Shares in Paragon Entertainment plunged after it announced a £150,000 restructure programme.
The visitor attraction designer said cost over-runs on two projects meant earnings would be lower than expected.
As a result Paragon, which built Wallace & Gromit’s Thrill-O-Matic ride at Blackpool Pleasure Beach, is looking to slash annual expenses by £400,000, resulting in a one-off cost of £150,000.
Shares dived 26.8 per cent, or 0.55p, to 1.5p.
Back on the FTSE 100, Marks & Spencer has been upgraded from ‘underperform’ to ‘neutral’ by analysts at Credit Suisse.
The investment bank believes the retailer still has structural issues but added that the ‘velocity of change in the business has picked up’.
The retailer’s shares nudged up 1.2 per cent, or 3.4p, to 284p.
Rotork, a valve maker for the oil and gas industry, was one of the FTSE 250’s biggest risers following an upbeat trading update.
It reported a 10.2 per cent increase in revenue in the first three months of the year, with orders up nearly 21 per cent. The firm predicts ‘mid to high single-digit growth’ in revenues for the full year.
Rotork’s shares leapt 10.9 per cent, or 32.7p, to 331.6p.
Analysts backed soft-drink maker AG Barr’s move to reduce sugar in its range ahead of the Government’s tax hike on sugary drinks.
Investec has increased the target price of the Irn-Bru maker from 685p to 745p, adding that its lower sugar portfolio is ‘well positioned to seize any growth opportunities’. Shares in the firm edged up 0.3 per cent, or 2p, to 690p.
In the small caps, betting firm Sportech sold its Dutch business, Sportech Racing BV, to RBP Luxembourg for £2.85million.
In June last year, Sportech was granted a five-year licence for the exclusive right to carry out tote betting on horse racing in the Netherlands.
Last month Sportech, the former owner of the Football Pools, took itself off the market after unsuccessful talks with a number of potential buyers. Its shares ended the day flat at 65p.
Nanoco shares were flying after the firm signed a new agreement with a US-listed firm to provide nanomaterials for advanced electronic devices. Shares bumped up 9.5 per cent, or 3.5p, to 40.4p.
On AIM, the US Environmental Protection Agency gave Tristel, which makes infection protection products, a boost by approving its foam-based chlorine dioxide disinfectant Duo.
Shares rocketed 9 per cent, or 25p, to 302.5p.