Warning wipes pounds 140m off Fine Art shares

Fine Art Development saw pounds 140m wiped off its share value yesterday after the cards and mail-order company warned that results for the year to March 1997 would be "substantially below market expectations". The company's shares fell 40 per cent to 262.5p.

BZW, brokers to the Bradford-based company, now forecasts that Fine Art's profits will be around pounds 30m, as opposed to the pounds 46m the market had previously expected. Last year it made a profit of pounds 41.1m.

Keith Chapman, Fine Art's chairman, said the shortfall was due mainly to poor sales from its agency mail-order business in the vital run-up to Christmas. Mail order sales were pounds 7.5m lower in the 33 weeks to 15 November than the same period last year.

Mr Chapman said this represented an 11 per cent fall when pre-Christmas sales of cards, gifts, personalised stationery and the like should be at a peak. The chairman said the problems started when it failed to recruit enough new and repeat customers in the summer.