18th Feb 2020 10:27
(Alliance News) - Titon Holdings PLC on Tuesday issued a profit warning on the back of continued political and economic uncertainties.
Shares in Titon were down 15% at 93.45 pence each in morning trade.
The company, which manufactures and supplies ventilation systems as well as window and door hardware, said trading conditions across its business regions in the first four months of financial 2020 have been tougher than expected.
As a result, underlying pretax profit for its year ending September 30 will be materially below management's expectations. In financial 2019, underlying pretax profit totalled GBP2.2 million.
Titon Chair Keith Ritchie, in his annual general meeting statement, said: "Sales in our Ventilation Systems business in the UK have risen slightly compared to the same period in 2019, but sales of our window and door hardware products in the UK have been lower than we expected as the UK economy suffered a very weak fourth quarter in 2019 and competition intensified.
"Despite reduced political uncertainty, we have not yet seen any uplift in trading in 2020 following the 2019 general election and the UK leaving the EU on January 31."
"Activity levels in the Korean new-build market have continued to fall as the government there has intervened to slow house price growth through restricting lending. This means full-year sales by Titon Korea are expected to be some 10% lower than we forecast at the time of the release of the preliminary results announcement in December," Ritchie continued.
In Europe, the company's Ventilation Systems sales have been significantly weaker than expected due to over-stocking by customers and delays in several German projects. Titon's Hardware business in the US has also traded below expected levels.
"We are clearly disappointed that current trading has continued to be challenging for the first four months of the financial year, but we have taken steps to manage our cost base by reducing our workforce and continuing to bear down on all costs in the business for the rest of the year," Ritchie concluded.
Titon is slated to release results for the six months to March 31 on May 14.
By Tapan Panchal; [email protected]
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