Hasgrove announces profit warning
Communications group Hasgrove, which owns The Chase and Landmarks, has issued a profit warning following a board review, with operating profit expected to be around £1.5m, below current market expectations of £3.3m.
The company has said with the exception of the sale of Interel for £0.8m, the operating profit would be nearly half of the expected amount, but that following a refinancing of the group’s banking facilities in September, alongside current trading, it had no issue with bank covenants.
The company has already highlighted that both The Chase and Landmarks have had ‘difficult’ trading conditions in recent months, and will have a shoftfall in operating profits against the target of £0.6m. Reduction in profits of £0.4m will also be incurred as a result of overrun on two business solution projects.
Delays in client decision on spend of over £0.3m has been deferred from November and December into next year, with the board also planning to take a cash write-off of £0.3m of product development costs.
Despite this, the group has said that its pipeline ‘remains encouraging’ and that there will not be any significant impact until the start of next year.
Paul Sanders, group chief executive, said: "We are clearly very disappointed to be reporting a profits warning and will continue to take the required action. We continue to control costs where appropriate and are focused on servicing our clients.
"Our new business pipeline is growing well, with a good volume of work coming through now and for 2012. Following our recent refinancing we are comfortable with our banking arrangements."