26th Apr 2016 07:45
LONDON (Alliance News) - Home safety products supplier Sprue Aegis PLC on Tuesday said its pretax profit was reduced in 2015 by a recently-flagged one-off warranty charge, though revenue surged on good sales in France and the UK.
Last week, Sprue trimmed its expectations for its 2015 results after deciding to increase its warranty provision following an issue with batteries from a third-party supplier.
Sprue said it has recently identified an issue in certain batteries from a third-party supplier which may cause a premature low-battery warning in some of Sprue's smoke alarm models sold in the UK and Europe.
This resulted in the group booking a GBP5.5 million one-off charge for 2015, meaning pretax profit fell to GBP6.8 million from GBP9.7 million.
The charge wiped out a very strong trading performance for the group, with revenue rising 35% to GBP88.3 million from GBP65.6 million.
Sales in France were particularly strong, pushing European sales up 35%, though this rate of growth slowed more than expected in the second half, Sprue said.
Sales in the UK were up 32% year-on-year, largely due to higher carbon monoxide detector sales following the introduction of private landlord legislation and increased marketing activities.
Sprue said it will pay a 5.5 pence final dividend, down from 6.0p a year earlier, meaning its total dividend will be flat at 8.0p.
"I apologise to all stakeholders for the impact the recently announced battery warranty issue is having and wish to reassure all customers that we will meet all of our customer service obligations to replace products that exhibit a premature end of life battery warning," said Graham Whitworth, Sprue's executive chairman.
"With new product certifications underway already and sales into Germany expected to recover strongly, we expect to build momentum in trading in the second half of 2016 and into 2017," he added.
Shares in Sprue were up 2.9% to 126.00p.
By Sam Unsted; [email protected]; @SamUAtAlliance
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