17th May 2016 07:13
LONDON (Alliance News) - Haynes Publishing Group PLC delivered a blow to shareholders on Tuesday after warning its profit for the full year could be up to 30% lower than market expectations, adding it plans to cut jobs and downsize the business in order to reduce costs.
Haynes said it "has become clear" that its profit before tax and exceptional items in the financial year to finish at the end of this month will be up to 30% less than the current market forecast of GBP2.6 million.
That suggests pretax profit could be as low as GBP1.8 million this year. In the last financial year, Haynes posted a pretax profit before items of GBP2.5 million, which in turn had experienced a dramatic fall from GBP4.2 million in the previous year.
"In the UK & Europe, management are able to report a more positive position, with the group's consumer and professional businesses both performing in line or ahead of expectations," said the publisher.
Haynes said it has also fully evaluated the proposals put forward under its operational and cost review. The review will lead to the closure of its distribution facility in Nashville in the US, with the members of staff at that plant to be made redundant.
"With falling print manual volumes it is no longer commercially viable for the group to maintain its own printing and distribution facility in the US," said Haynes.
In addition, Haynes is closing its Swedish business and said it will now service its customer base that lies within Scandanavia from its UK operations.
Overall, the downsizing will lead to 41 jobs being cut from its US, Australian and European operations, which represent around 17% of the total workforce.
"The board is confident that the implementation of the review's recommendations will place the Company in a much stronger position and allow it to grow the business going forward," said Haynes.
Exceptional costs in the financial year that is about to end will be around GBP4.0 million, with "two-thirds of these costs having a direct cash impact on the business," it said.
Haynes shares were untraded Tuesday morning. They last closed at 115.20 pence.
By Joshua Warner; [email protected]; @JoshAlliance
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