Wace shares crash on third profits warning

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The Independent Online
The catalogue of disaster at Wace, the printing company, continued yesterday when it issued its third profits warning of the year, together with a wholesale restructuring and an additional pounds 9m of exceptional charges. The company will now record an estimated pounds 2m loss for the year after what amounts to a "kitchen sinking" of the accounts.

Wace shares crashed almost 50 per cent to 69.5p on the announcement. They have dropped from 279p since March.

Wace blamed the latest setback on poorer than expected sales in September and October. This followed a warning at the group's annual meeting in May and again in the half-year results announcement in August that consistent sales had failed to materialise. "We have highlighted the problems as soon as they have come to light but the performance in the last three months has been disappointing," said Wace finance director Stephen Puckett.

In August Wace had reported a 60 per slump in half-year profits to pounds 4.2m but chief executive Trevor Grice made a bullish pronouncement on future prospects.

Wace said yesterday that the difficult trading conditions had prompted a wide-ranging review of the business. The results will be several closures and disposals as the group tries to move away from highly competitive commodity businesses.

Wace has already closed its Glasgow site with the loss of 58 jobs. The publications imaging division, which has under-performed for some time, is to be sold though it is expected to fetch only a nominal sum.

The two sites in Paris will be merged into a single factory. In the US, three businesses in Grand Rapids, Memphis and New York will be sold. All Wace's US operations will now be concentrated in Chicago, with five existing sites streamlined into just one.

The total number of jobs lost will be around 90. The pounds 9m re-structuring charge is in addition to the pounds 4m charged during the first half.

The company said it intended to focus on digital imaging, in what it described as the growth areas of electronic publishing and on-line digital media.

Wace was one of the glamour stocks of the 1980s when it was run by youthful chief executive John Clegg. Trevor Grice took over in 1992 and won some praise for cutting costs and reducing debts.

However, its recent record has been one of continual disappointment. The company said yesterday that it had spoken to some of its institutional investors who were "not particularly happy".

There were queries earlier this year about the company's accounts, though there was no suggestion of impropriety. It is understood the accounts have since been given the all-clear by the Financial Reporting Review Panel.