Stockbrokers' profit forecasts were slashed by 40 per cent and BSG shares slumped from 68p to 56p in response to the warning. Panmure Gordon, the company's broker, reduced its profit estimate for the year to 31 December from pounds 14m to pounds 8.5m.
Falling demand means BSG's profit for the full year will show little advance on the first six months. Moreover, the much-reduced second-half contribution will be nullified by pounds 950,000 of redundancy costs.
However, BSG is also hoping to sell two pieces of freehold land on which it has factories and then lease the properties back. If it succeeds before the year-end, profits are expected to benefit by pounds 2m.
Most of BSG's difficulties concern its manufacture of wing mirrors and coloured coverings for brake lights and indicators. It also makes interiors for aircraft, child car seats and has 14 car dealerships.
Richard Marton, managing director, said the company's car component operations were losing money. But he added that new US production facilities would return the business to profitability next year.
Announcing interim results in September, Mr Marton said European car production had shrunk by 15 per cent.
Yesterday he said: 'Since then there has been a further deterioration in Continental European car production, and it is estimated that for the year as a whole, production will be 20 per cent lower than in 1992.'
He said there were no signs of further falls in production, but that there was no evidence of recovery either. 'I do not expect to get any help from the market place next year.'
Despite the unpromising outlook, BSG said it intended to pay a maintained final dividend of 2.5p, making a total of 3.2p - the same as for 1992. At 56p, the shares yield 7 per cent.
BSG appointed Michael Stoddart, chairman of Electra Investment Trust, as a non-executive director. It intends to make Mr Stoddart non-executive chairman by next October.Reuse content