25th Feb 2016 08:57
LONDON (Alliance News) - Tobacco machinery and control instruments manufacturer Molins PLC on Thursday said pretax profit sank in 2015 under the weight of tough market conditions, prompting it to cut its dividend.
Shares were down 16% to 65.22p following the announcement, one of the worst performers in the AIM All-Share.
The company said its pretax profit for the year to the end of December nearly halved to GBP2.0 million from GBP3.9 million. Revenue was essential steady at GBP87.0 million from GBP87.4 million but cost of sales increased, hitting margins.
Molins said the results were in line with market expectations, but said its Instrumentation & Tobacco Machinery division has continued to be hit by challenging market conditions which have offset a more-encouraging performance from its Packaging Machinery unit.
The group also cut its dividend payout for the year, declaring a final dividend of 1.5 pence, meaning its total payout falls to 4.0p from 5.5p. Molins said it needed to conserve cash for a likely increase in the UK pension levy and other purposes.
"The board is mindful of the challenges being faced in 2016, which we anticipate will include a significant rise in the statutory levy payable to the Pension Protection Fund, and we also continue to review strategic growth opportunities. We therefore consider it appropriate to retain more funds within the group and to reduce the level of the proposed final dividend," said Dick Hunter, Molins' chief executive.
"Looking further ahead, both divisions remain well positioned to progress as the trading environment improves, and we continue to view medium-term prospects more positively," he added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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