UK: Molins Slides After It Issues Profit Warning On Weak Tobacco Orders

Source from:  Alliance News 10/11/2014

Engineering and services company Molins PLC Friday said it expects its full-year pretax profit to be below current market forecasts, mainly because orders have dropped and some machinery deliveries are delayed in its tobacco division.

In a trading update, the company said it intends to hold dividend payments at current levels.

"The tobacco sector market conditions and geopolitical instability highlighted in our August statement have resulted in weaker order prospects and delays to expected machine deliveries in the Tobacco Machinery division, with the Scientific Services division also affected by tobacco customers delaying orders for instrumentation, following strong intake in the first half," the company said in a statement.

It said prospects in its packaging machinery unit remain good, with order intake and sales in local currency ahead of last year.

"We continue to invest in products and infrastructure and work towards realising the value of surplus property in the group," it said.

Molins maintained its full-year dividend at 5.5 pence a share in 2013, after reporting a 10% rise in underlying pretax profit to GBP5.4 million on a 13% sales increase to GBP105.2 million.

Panmure Gordon is currently forecasting that the company will report a pretax profit of GBP5.1 million in 2014, while Charles Stanley Securities has a forecast of GBP5.3 million, according to data on Morningstar. Enditem