Promethean World’s fresh profit alert as sales fall
INTERACTIVE education products group Promethean World has sounded a fresh profits warning and says its will cut costs deeper and harder than it first expected.
Amid falling sales and in an environment which the Blackburn-based group said it cannot see improving in the short term, Promethean said quarter and year-to-date revenues in the nine months to the end of September were in both North America and international sales regions are down versus prior year comparatives.
It said: “Demand during the key buying season in the US has been lower than recent years, and this has been accentuated by the delay in a large order, which is now anticipated to be received in the fourth quarter.”
Year-to-date group revenue was £123.2m, 30% lower than the same period in 2011 (£175.9m), and 30.3% lower on a constant currency basis.
Third quarter group revenue was £40m, down 41.2% versus the third quarter in 2011 (Q3 2011: £68.0m), or down 40.9% on a constant currency basis.
On the question of cost cuts the company said: “We are now targeting the level of cost reduction in 2013 to be at the higher end of the 20-25% range (versus 2011 levels) that was previously quoted. Consequently, operating costs for 2012 will be lower than previously expected with the full benefits being realised in 2013.”
Despite taking such action, the group said it “now anticipates that full year results will be below current market expectations”.
It added: “For 2013, the group expects that market conditions will continue to remain difficult. Promethean is resizing its cost base to reflect these realities, with the aim of remaining an underlying profitable cash positive business whilst protecting its core investments in R&D.
“Promethean believes that, over the longer term, the impact of interactive learning technology is proven and this, coupled with the development of our integrated software and hardware strategy, means that Promethean remains well positioned to benefit when market conditions improve.”
