10 March 2011 – trading update

It is extremely disappointing to have to report that the company has issued a profit warning today.  Although recent acquisitions have been integrated successfully, the group experienced weak trading in December and January and although some recovery was seen in February, and more progress is expected in March, the full year results are expected to be below expectations.  In addition, the group believes that forecasts for the year to March 2012 are also too high.  Cost reductions are being implemented and the company is also to raise some £500,000 through the issue of convertible loan notes.  Despite the disappointing news the company remains optimistic about prospects.  However, even though it is one of our Shares of the Year, we are concerned about these latest developments and for the moment reduce our recommendation to HOLD.