Profit warning hits Metrotect

Shares in Metrotect plunged 18p to 41p yesterday as the West Yorkshire pipeline materials company warned that profits for the year to the end of March would not match predictions made at the time of the interim results.

At the same time the company announced the resignation of Brian Thomas as executive chairman. Mr Thomas, 53, will be succeeded by John Philips, currently business development director of the group and previously managing director of Vernons Pools.

In a statement to the Stock Exchange the company said second-half profits would make only a minor contribution to full-year results.

At the time of its interim results the company had said that second-half profits would match the £800,000 pre-tax profits in the first half. The company made £2.3m in the year to the end of March 1994. The statement said: "During previous years the second half trading period has traditionally been strong and indeed currently, invitations to tender and the value of existing tenders in the market awaiting contractors decisions to proceed is high. Nevertheless the award of firm contracts on certain expected projects has been delayed and this had led to a lull in current levels of activity."

The statement added that the amount of a final dividend payment would be reviewed in light of actual results for the year to March 31 1995.

Budgeting and management accounting procedures are to be made more formal. Currently the company prepares budgets on a quarterly basis. This is to become monthly and weekly.

Guy Thomas, the company's finance director, said Mr Thomas's departure "was not entirely linked to today's announcement. The board has been strengthened and this seemed a good time for a change anyway."