22 August 2012 – trading statement

The company has issued a disappointing trading statement this morning warning that profits for 2012 are likely to be below expectations.  This is despite the fact that reveenues in the first half were 11% higher than 2011 and net debt has also fallen to £3.2m at the end of June (31 December 2011: £4.1m).  Further reductions in the cost base have been made in the second quarter and July involving some redundancies and the benefits of these should be seen in the second half.  Nevertheless, the group has returned to underlying profitability in recent months and we rate the shares as a BUY.