10th Mar 2016 09:04
LONDON (Alliance News) - Home-safety products company Sprue Aegis PLC on Thursday saw its shares fall after it said it has renegotiated its supply agreement with DTL, and the effect of this will result in its operating profit for the year falling below market expectations.
Sprue said DTL, which supplies Sprue's own-branded smoke alarms and accessories, has invested in a new technology manufacturing facility and is bearing increased labour costs in China. Due to this, Sprue has agreed to accept modest price increases under its supply agreement and will bear the part of the effect of sterling's weakening against the dollar.
The effect of the changes to the agreement will mean Sprue's operating profit for the year to the end of December 2016 will be around GBP8.3 million, slightly below market expectations.
Shares in the company were down 9.8% to 263.90 pence on the news, one of the worst performers in the AIM All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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