Three firms issue profits warnings

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The Independent Online
THREE COMPANIES issued profit warnings yesterday, casting a pall over earnings expectations. The worst hit was Caverdale Group, which lost a a quarter of its market value to hit a five-year low.

Caverdale shares fell 28p to 73.5p after the leisure products retailer warned that annual profits would fall significantly short of market expectations.

Coats Viyella, the British textiles giant, lost 3p to close at 41.25p after saying that its trading results for the first half of the year would be below last year's.

And Unigate, the food and distribution group, saw its shares fall 13p to 384.5p after it warned that first-half profits would be lower, although progress is expected in the second half of its financial year.

Caverdale said that while trading across most of its divisions continued to be in line with expectations and progress in its leisure marine operations had been strong, the growth of sales at its newly opened motorcycle accessories retail outlets has been slower than expected. "The additional costs incurred by Caverdale during its expansion have not been offset by sales," said the company.

Analysts had been looking for annual pre-tax profits of around pounds 5.2m after profits of pounds 6m last year.

Coates Viyella blamed poor market conditions in Britain, which it said had continued into 1999. Despite operating in an adverse trading climate, the company's businesses had started to show the benefit of radical management action, it added.

As for Unigate, its chairman Ian Martin said that it was too early to say whether the company's first-half shortfall would be recovered by the year's end.

Mr Martin said: "Trading conditions remain challenging and consequently some of our food businesses have had a difficult start in the current year, with overall profits well below last year's levels."

One company bucking the trend was British Steel, which saw firm demand in steel markets around the world sending shares up 4.25p to 161p.