Ferraris warns profits will miss targets

Ferraris, a medical equipment maker, saw £11m wiped off its market value yesterday after warning that current-year profits would be "slightly lower" than market estimates.

Ferraris, a medical equipment maker, saw £11m wiped off its market value yesterday after warning that current-year profits would be "slightly lower" than market estimates.

The company said it had taken action to cut labour costs after economic conditions in the US hit sales of technology aimed at the semiconductor market as well as some of its medical products. Combining certain sites in the UK and US is also under consideration. Ferraris makes products for the asthma and cardio-respiratory markets as well as producing components for MRI scanners. Just over 10 per cent of its 1,400-strong workforce are based in the US.

The company's house broker, Investec Henderson Crosthwaite, yesterday slashed £700,000 off this year's profit forecast to £6.3m and £800,000 off next year's profit forecast to £7.3m. Shares in the company fell 17 per cent to close at 186p.

Ferraris said it was still planning to sell its engineering division and hoped to complete the sale of its instrumentation business to management at book value before the end of this month. Offers for the remaining engineering companies are being evaluated at figures "in excess of book value", it said.

"Overall, trading is satisfactory," the company said, noting that earnings per share for the year ending 31 August would be ahead of last year's figure. Profits in 2000 were £3.5m.

It said its Reynolds Medical unit, which makes ECG products, had performed to expectations and that integration plans were well advanced. Other divisions performing well included Metalcraft, a body scanner parts maker, whichwon a £3.3m contract, while Ferraris Pulmonary extended its Morgan Medical contract with DTI-Healthcall.