Shares in Scapa Group, the industrial tape and cable maker, dived 21 per cent yesterday after the company said that trading in Continental Europe had deteriorated further.
The group last updated the market with its interim results on 22 November, when it said difficult trading conditions were already apparent.
"Since that time ... the European cable market has turned down dramatically and the softness identified in the industrial assembly and printing and graphics markets at the time of the interim results has continued," the company said.
Full-year pre-tax profits will be 40 per cent below City expectations, Scapa warned, as its European operations would not make a "material" contribution to the group's profitability. Analysts had forecast pre-tax profits of £13m for the year to 31 March 2002 before yesterday's statement. The previous year saw profits of £23m. There were suggestions yesterday that the final dividend payout this year will have to be cut.
Scapa said that its cost reduction programme, announced in November, will be extended as the company expects the "challenging" trading environment in Europe to continue into the first quarter of the next financial year. Scapa shares closed down 16p at 59.5p, having already fallen from 136.5p over the last 12 months.Reuse content