Poor trading and the cost of reorganising loss-making subsidiaries mean profits for the year to September will be 40 per cent down on last year's pounds 1.25m. The shares fell from 55p to 38p.
In May, Holmes reported interim profits up 25 per cent to pounds 461,000, reflecting the continuing improvement from a pounds 4.76m loss suffered in 1992. But since May, the company said, 'trading within certain of the group's subsidiaries has been at a disappointing level due to existing clients either reducing or deferring marketing expenditure'.
At the halfway stage, Holmes had won significant new business, but it said yesterday: 'The financial benefit of these client gains will not materially benefit the current year's outcome but will improve revenues for next year.'
Holmes' bankers have agreed to a 12-month capital repayment holiday on its medium-term loan. The long-term loan has been extended by 12 months to December 1999.
The company's turnover at halfway was down pounds 3.38m at pounds 13.3m. About pounds 1m of this decline was due to the closure of the consumer advertising agency in 1993. John Holmes, chairman, said at the time that net borrowings at 31 March were pounds 8.6m, about pounds 400,000 down on the 1993 year-end.Reuse content