Specialeyes shares take bumpy ride: Newspaper tip and profits warning send mixed signals on position of spectacles retailer

A NEWSPAPER share tip followed by a profits warning gave Specialeyes, the USM-quoted spectacles retailer, a white-knuckle ride yesterday. After opening at 16p, the shares reached 21p before closing 2p down at 14p.

Mark Raines, managing director, said that October and November, normally the strongest months in the year, were below expectations. The warning was made, he said, in response to a sudden and unjustified rise in the share price. Due to poor trading at the end of the year to November, the company would make a loss in the second half, although it would be smaller than the first-half deficit of pounds 339,000.

Traditionally sales of glasses rise in the late autumn as shorter days remind people that they are finding it harder to focus. Mr Raines said that the seasonal peak had not happened last year.

The profit warning punctured hopes that the company was recovering after a patchy record and a change of management.

Last May, Specialeyes announced a pounds 2.3m loss but said that sales were running 13 per cent ahead of the previous year and that it had put in place a business plan that would see the company focus on a one-hour service from high street locations selling cheaper glasses. The plan, which also involved refurbishing Specialeyes' shops and installing electronic point of sale equipment, was funded by a pounds 1.5m issue of convertible loan stock.

Specialeyes came to the market in a blaze of publicity in 1987, pitching its flotation at 77p a share. But the abolition of free eye tests in April 1989 struck the industry a blow from which, in the face of recession, it has struggled to recover.

(Photograph omitted)