Cala shares rocked by warning

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The Independent Online
The weak housing market and tough trading on the high street forced two more companies to issue profits warnings yesterday.

Claremont Garments, the textile group that makes lingerie and outerwear for Marks & Spencer, said its pre-tax profits for this year were likely to be the same as last year. The warning follows similarly downbeat announcements yesterday from Courtaulds Textiles and Coats Viyella, the textiles group that also owns the Jaeger fashion stores.

Shares in Cala Homes fell from 111p to 87p when it said it would not reach its profits forecast this year. It said the housing market had been weak since the company's year-end in October. Visitor levels and sales reservations had been particularly low in the South-east. Reservations had been better in Scotland and the Midlands but the fragility of the market had forced the company to cut prices and use incentives to boost sales. Margins had fallen as a result.

Profits from land sales and property lettings are expected to fall over subsequent years, the company said.

"We do not anticipate any fundamental improvement in the market in the short term but would expect the usual seasonal spring upturn," the company said. The builder's "best estimate" of this year's profits is around pounds 4.1m, similar to last year's levels. It expects to maintain the dividend at 3.2p.

Claremont Garments blamed fragile consumer confidence and the warm autumn weather for a difficult environment. These factors damaged sales until mid-November when the weather turned colder. The shares were unchanged at 270p.

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