Rhino shares hit by profits warning

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The Independent Online
Shares in the video games retailer Rhino, which lost half their value during last year, fell further yesterday after the group issued a profits warning, writes Nigel Cope.

Rhino said that for the year to 31 December it expected to make a pre-tax loss of about £2m, worse than brokers' estimates. The shares dropped a further 2p to 17p. Smith New Court is forecasting losses of more than £2.5m for the year.

Management blamed discounting by competitors and the reluctance of customers to buy games before Sega and Sony launch new computer systems later this year. The impending launch of a virtual reality system from Nintendo has also made customers hold back.

However, some blame Rhino for initiating the price war. It has been aggressively expanding market share and has 112 stores under the Future Zone name.

Trade in December was good, the company said, though not sufficient to make up for a disappointing summer and autumn. Management, led by Bev Ripley and Terry Norris, said 1995 would see an improvement and Rhino forecast a 20 per cent increase in the video and computer games market this year.