Shares in Brake Bros, Britain's biggest food supplier, dived 10 per cent after it warned of a material drop in full-year profits.
Brake, which includes hotel chains such as Hilton and pub companies such as JD Wetherspoons among its customers, said 11 September had exacerbated the general economic slowdown in the UK and France.
"If the trading conditions experienced in the last two months persist, then the outcome for the year will be materially below market expectations," Brake said. Its shares shed 52.5p to 465p.
Len Hughes, the finance director, said sales to in-flight caterers dropped by up to 40 per cent, mainly because of the fall in transatlantic flights. "London hotel occupancy rates are down by 20 per cent since 11 September and this has impacted our performance by about the same amount," he added.
Brake, which supplies food to the British and French catering industries, said November and December were the group's two most important trading months. Yesterday's profits warning was the third this year.
Darren Shirley, an analyst at ING Barings, was downbeat about Brake's immediate prospects. "The issues are out of their own hands. Since 11 September, the mix of sales has changed dramatically with Brake losing higher margin business. I can see this continuing into the summer of 2002," he said.
Mr Hughes said the company would focus on containing rather than cutting costs. "We don't want to damage the business by over-reacting. We need our infrastructure to meet our busiest time of the year," he said. No job cuts are planned.
Analysts slashed pre-tax profit forecasts by about 15 per cent to £35m from £40.5m. They expect next year's profits to fall to £40.5m from £48m.
Brake had been counting on a much stronger second half after a squeeze on margins and costs related to acquisitions saw interim pre-tax profits drop 35 per cent. It has spent about £120m on acquisitions in the past two years.Reuse content