13 January 2013 – trading update
A trading update has been announced ahead of final results for 2013, which are due to be released on 2 April. For the year ended 31 December 2013 underlying profit before tax is expected to be around £4.2m, with reported profit before tax significantly ahead of the prior year, as restated. Borrowings were approximately £23m at 31 December 2013, down £6m on a year earlier.
The company expects underlying profit in the current year to be below that achieved in 2013. Continuing pressure on margins is anticipated and although action is being taken to reduce costs and improve efficiency, it is likely to be the second half of 2014 before meaningful benefits are realised. Although the latest news is negative the share price is already bombed out and although recovery may be slow we feel that a SPECULATIVE BUY rating is appropriate.