Bottom Line: Blenheim worries

DISMAL results and yet another profits warning from Blenheim simply confirmed the market's worst fears. Staffan Svenby, the newish managing director, is introducing welcome changes, but things may get worse before they get better.

What he aims to do is change the culture of the company. In the process he is taking direct command of each of Blenheim's arenas of operation, which previously operated as individual fiefdoms.

He has also promised to reduce operating costs, particularly in France, one of its largest and most difficult markets. Organic growth is now centre of attention.

However, the climb is steep. Profit margins are under pressure, cash is leaking out of the business and debt has risen worryingly.

In addition, the timing of the remedial actions gives little confidence. Blenheim should have been wielding the axe as recession hit, not just as it seems the worst is past.

Assuming annual profits of pounds 35m, the shares trade on a multple of 10. The generous yield of 6 per cent also speaks volumes. Steer clear.