Premier Farnell’s share price plummets as it issues second profit warning in two months
Electronics company Premier Farnell's share price dropped 15 per cent in morning trading after issuing its second profit warning in two months.
The company, which used to be run by former Thomas Cook boss Harriet Green, reported that pre-tax profit for the first half of the year had fallen 16 per cent to £30.6m and that interim dividends would be slashed 40.9 per cent to 2.6p.
It warned profit for the full year would be lower than expected, in the range of £73-77m.
Despite underlying sales growth of 2.9 per cent year on year the FTSE 250 manufacturer said profit margins had decreased in the first of the year from 9.5 to 8.2 per cent.
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This comes on the back of a profit warning issued in July, when Premier Farnell said profits would slide 10 per cent on the previous year. At the same time it announced an operational review, which included ousting chief executive Laurence Bain.
Mark Whiteling, who stepped in as interim chief executive, said that core UK and North American markets had continued to slow since then, forcing the board to issue another warning.
Premier Farnell will also pull the plug on its Brazilian operations, which it says are too expensive for too low returns and sell off Akron Brass, its fire-fighting equipment maker, which does not fall within the company's refocused core distribution operations of production and production.
In its statement is morning, the company said it was looking to make £4m of savings this year.
At pixel time shares were down 14.48 per cent.