Big regional corporates issue warnings on profits
Tough economic conditions across retail, construction and manufacturing cut across a series of gloomy trading statements to the stock market this morning.
Pet retail giant Pets at Home said it had experienced “resilient growth against a challenging comparative” in a third quarter trading update this morning, but admitting that growth in retail business was “not at the levels we had expected”.
The company warned the market it expects 2024 underlying profit before tax to be around £132m, based on “no sequential improvement” in the retail business.
Lyssa McGowan, chief executive said: “While a slower market over peak meant our sales growth didn’t quite hit the levels we expected, the business remains well positioned to benefit from long term growth in the sector as we continue to win share and grow volumes across food and deliver differentiated performance through our unique vets business.”
She also issued a note of optimism that the benefits of the new distribution centre and digital platform will kick in and will create opportunities to improve cross-sell into accessories and further grow share of wallet. “With these foundations now in place we are well positioned for the future,” she said.
Construction industry plant supplier Speedy Hire claimed to be making “good progress” with its long term “Velocity” strategy, but said it had weakness “in some of our end markets and seasonal product lines”, and some delays in mobilisation of significant contract wins.
Concluding: “the Board expects the full year profits to be below its previous expectations.”
Skelmersdale-based hydraulics business Flowtech Fluidpower said the business would hit the underlying market forecast of £115m in revenue and underlying profit before tax of £4.6m but described a “subdued market”.
The company experienced a decline in revenue of 2.2% with weaker performance in Great Britain specifically in product distribution and in Engineering Services where a small number of larger customers experienced market headwinds and resulting volume reduction.
The business in Ireland showed particularly strong growth and the board intends to build on this success and is aiming for similar growth in other regions in 2024.
Chairman Roger McDowell said: “In 2023, we welcomed Mike England as our new CEO. With some significant team changes, he has focussed on implementing the near term performance improvement plan and the refreshed strategy to enable the firm platform from which the business can grow over the medium term. Whilst 2023 has been a more difficult year, I am confident that the actions Mike and his team are taking will drive strong returns in shareholder value.”
There was better news from Northcoders, the AIM listed technology training business said the year ending 31 December 2023 hasn’t got any worse since they issued a profit warning last year and expects to post revenues of £7.1 million and underlying EBITDA of £0.1m.
Northcoders has also been buoyed by its largest ever Department for Education Government funding round. This will generate a 18.6% increase in funding per student which will support the Group’s profitable growth and assist in offsetting inflation linked costs. The newly built ‘NCore’ platform has now been released, driving efficiencies and enabling the Group to explore even broader teaching mechanisms and iterations of the courses.
