Amstrad shares slide on third profits warning: Worries about trading in run-up to Christmas also knock Dixons
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Your support makes all the difference.AMSTRAD, the consumer electronics group run by Alan Sugar, yesterday provided a gloomy assessment of high street trading conditions with the third profits warning in the past 18 months.
This led to a 20 per cent slide in the shares from 50.75p to 43p, wiping more than pounds 60m off the company's market valuation to pounds 250m. The value of Mr Sugar's 36 per cent stake slumped by pounds 21m to pounds 85m.
Amstrad said trading conditions in October were 'poorer than anticipated, particularly in the UK' where volumes and margins had been under pressure. It expects weak demand this month and next.
The news added to growing concern about Britain's recovery prospects and consumer demand leading up to the Christmas shopping period.
In a statement made at its annual meeting Amstrad said: 'While the outturn for the Christmas season still remains unclear the board is concerned that in the current financial year, sales and margins will not achieve last year's levels.
'Current market expectations for Amstrad's sales and operating profit for the year to 30 June are therefore likely to be optimistic.'
The company's net cash has fallen from pounds 167m in June to pounds 140.5m at the end of last month, due to seasonal factors.
The warning forced City analysts to downgrade their profits forecasts for the full year, with Hoare Govett cutting its taxable estimate by pounds 5m to pounds 17m. Analysts said the move reflected a price war in personal computers, slower growth in satellite receivers and recession.
The warning came as a new war of words broke out between the company and Gideon Fiegel, a private investor who spearheaded a massive shareholder rebellion against Mr Sugar's bid to take Amstrad private last year.
Leading a heated debate Mr Fiegel demanded that its directors repay pounds 1.1m incurred by the company in connection with the buyout. The investors also said Amstrad's cash pile be distributed among shareholders.
Since the buyout failure Amstrad has been trying to rebuild investors' confidence. It has brought in two non-executive directors and plans to appoint a new chief executive, leaving Mr Sugar to concentrate on overall strategy.
Last September it paid pounds 6.4m for Dancall, the Danish mobile telephone maker.
The market had responded by pushing up Amstrad shares from about 30p in January to a year's peak of 55p last Monday.
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