Rugby Group misfortunes drive industry shares down

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The Independent Online
WILLIAM GLEESON

A string of profit warnings sent cement and home furnishing share prices tumbling yesterday. Shares in cement companies fell after a gloomy trading statement from Rugby Group, which said demand in its major markets was flatter than had been anticipated. Rugby's shares fell 9p to 106p.

Other cement companies whose shares fell on Rugby's bad news included Blue Circle, which fell 4p to 281p, Redland, which fell 7p to 412p and RMC, down 8p to pounds 10.56.

Other warnings came from Delaney, the bathroom company, Essex Furniture, the furniture manufacturer, Life Sciences, the scientific equipment company and Fine Decor, the wallpaper company.

In a statement, Rugby said difficult trading conditions in the UK had seen some volumes lower in the second quarter than at the same time last year. The company said that similar pressures in US and Australian markets had offset the improvement seen in the first quarter and reduced expectations for the full year. The outlook was for continued subdued trading.

At the same time, Rugby said it had a conditional agreement to buy US- based Pioneer Plastic Corp, a supplier of high pressure laminates, for an initial $71m (pounds 47m).

Delaney Group, whose shares fell 2p to 5.5p, said it expected to report a loss for the first half, compared with its originally break-even estimates.

Delaney said it was too early to predict the outcome for the year as a whole. The first half performance, however, would be affected by the current high level of expenditure on the introduction of new kitchen ranges.

The continued deterioration in the housing market had had a negative impact upon turnover levels in the home improvement sectors, added the company. Life Sciences, whose shares fell 2p to 122p, said it expects its earnings per share in the first half of the current year to be below the level achieved last year.

It too is making an American acquisition and will pay $19 million to acquire Spectronic Instruments.

Fine Decor, quoted on the Unlisted Securities Market, is to make a provision of pounds 390,000 after an increase in raw material prices.

Since publication of the accounts in mid-May, conditions in the UK wall coverings market have become somewhat more difficult and raw material prices are continuing to rise, said chairman Roger Regan at the company's annual meeting today.

In the face of these difficulties, the board recently undertook a major review of the group's operations.

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