Nobo warning rocks shares

Shares in the office equipment supplier Nobo lost a third of their value yesterday, falling 61p to 148p after the company warned that profits for the year to April would be "significantly below market expectations".

The house broker, Granville Davies, lopped £1m off its forecasts for both this year and next, trimming expectations from £3.7m to £2.7m this time and from £4.5m to £3.5m next year.

Roger Colvin, chief executive, said the shortfall stemmed from a marked slowdown in trading in the last two months at its largest subsidiary, Nobo Visual Aids. Nobo's largest customer had been destocking, while margins had also been squeezed by higher raw material prices.

Despite the fall in profits, Mr Colvin said Nobo would maintain its final dividend at 4p, giving a full-year total of 6.2p. Granville had previously pencilled in a full-year payout of 7p.

The profits warning comes as a blow to the company, which last year acquired four French companies for £6m and had previously bought an overhead projector maker, Elite - funding the purchases through a £10m placing and open offer.

Nobo had been looking to expand its product lines and to move into Europe using France as a springboard. At the time of the acquisitions the company said it was optimistic about trading conditions in the UK.