Profits warning causes shares to tumble at safety harnessing firm Latchways

February 10, 2014
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Shares in Devizes-based specialist safety harnessing firm Latchways slipped by more than 13% yesterday after it issued a profits warning.

The company, whose products are used worldwide by the construction, utility and maintenance industries, warned that its sales and profits for the year to the end of March would be “materially short of current market expectations”.

It blamed subdued conditions in its traditional construction markets at home and abroad and delays in securing contracts in newer sectors such as wind turbine re-related work.

Combined with the operational gearing of the company, the strengthening pound and the effects of continued investment in sales and new product development, these will push down annual revenues and profits, it said in an interim management statement.

Profit before tax is now expected to be in a range from £6.5m to £7.5m, the firm said.

However, the firm added in its statement: “Although these setbacks are disappointing, we are confident that our strategy of investing in the sales team and infrastructure of the business is the right course.

“The benefits of our recent investments will take time to reach their full potential but we expect these to be significant.”

It said cash generation and its balance sheet remained strong, with spending on its new building in Devizes largely complete and a net cash position of £10m of at January 31.

By mid-morning yesterday Latchway's shares were down 13.14% – or 167.50p – at 1,107.50p.

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