Avingtrans PLC reported interim pretax profits nearly halving and turnover falling 17 percent, saying conditions are likely to remain challenging. It also expects full-year profits below its expectations, however up year-on-year.
The shares fell 8 percent in early trading on the news and extended losses further, down 9.2 percent in late morning deals.
The precision engineering group made a pretax profit of £417,000 in the six months to November 30 2008, down from £798,000 a year earlier, while turnover fell to £17.5 million. It is not paying a dividend for the first half in order to preserve cash. It paid 0.5 pence a share a year earlier.
Chairman Roger McDowell said: “We remain confident in the robustness of the group's core businesses and believe that actions taken and planned will enable the group to deliver improved profitability for the year ended May 31 2009 over the previous financial year".
The pipeline of prospects across all divisions remains promising.
Although group revenues are down compared with the first half of last year, Avingtrans has cut costs accordingly in all areas to maintain profitability and it expects performance to significantly improve in the second half.
“However, the improvement will not be enough to match our previous expectations, though we still believe we will be ahead of last year,” it said.