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H2 warnings yield a significant drop in share price for Zenith |
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Written by Business Weekly
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Wednesday, 16 May 2007 |
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Herts-based Zenith's announcement of a £151k loss after tax for the six months to February 2007 and a warning that it expects sales for H2 to remain static has precipitated a massive 17 per cent drop in the cleaning and hygiene products company's share price.
The Zenith Hygiene Group said that its pre-tax profit before goodwill had risen 95 per cent, up to £605k from £310k a year before, on an increased net turnover of £20m, but amortisation of £364k and exceptional items of £392k, including costs for group re-organisation, integration of acquired businesses and costs in relation to the recent takeover approach, have left the firm in the red for the first half of the financial year. It said that anticipated seasonal uplift had been slower than expected and some of the more significant new business gains, such as contracts with Starbucks and Travelodge had started later than scheduled. The firm also warned that it was increasing pressure from its suppliers to accept increased prices, but that its leverage ability through expanded group size had allowed it to resist most of these so far. Shares in Zenith have shed 17 per cent of their value, dropping 21p to 102.5p. |
