Linx profits warning hits shares: Printing equipment maker blames poor sales in Europe
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Your support makes all the difference.LINX PRINTING, the printing equipment maker, issued a profits warning yesterday just six months after coming to the market. The company's shares, floated at 130p and reaching a peak of 218p, tumbled 36p yesterday to close at 139p.
Analysts had been expecting profits to jump by more than a third in the year to June but were shocked to learn that there would be no improvement on last year's figures.
The company blamed disappointing sales in Europe and said it was reviewing its marketing strategy on the Continent. It is understood that staff changes right up to board level are likely this week, although the company would say only that it hoped to make an announcement about planned changes within a week.
Linx said when it floated last October that it expected second-half sales to be 50 per cent higher than in the first half. In fact turnover is only about 10 per cent ahead. Sales in France have been especially poor, causing Linx to lose market share to the rival Domino Printing.
Both companies produce equipment to print variable information on fast-moving production lines. The industry has grown quickly as a result of requirements to print sell-by dates on food and drink packaging.
The company's two largest markets, the UK and Germany, have also suffered from increased competition, although Derek Harris, chairman, said sales in the Far East had grown strongly. Improved reliability in the company's ink-jet printers has reduced sales of high-margin spare parts.
County NatWest, Linx's house broker, reduced its forecast for the year to June from pounds 2.2m to pounds 1.6m. For the year to June 1994 it expects profits to improve to pounds 1.85m.
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