Hasgrove Releases Profit Warning – Shares Tumble

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Hasgrove Plc (LSE:HGV) released a trading update on Friday announcing lower profit expectations for the year ending 31 December 2011. Stocks were trading at 32p at 2:30pm GMT, down nearly 30% on the day.

The statement reported that operating profits for the year were now expected to be £1.5 million, much lower than the current market expectations of £3.3 million. Despite this drop in expected profits, the company believes there will be no issue with any bank covenants.

The company indicates that The Chase and Landmarks (now part of Amaze) design businesses have had trouble trading and will likely not meet the £0.6 million target for profits this year. On top of this, there was an overrun on two business solutions projects that cannot be recovered, resulting in a profit reduction of more than £0.4 million.

Hasgrove has also experienced delays in client spending decisions, with many postponing their spending from November and December into 2012.

CEO Speaks

Group Chief Executive Paul Sanders spoke on the profit warning:

“We are clearly very disappointed to be reporting a profits warning and have been and will continue to take the required action. We continue to control costs where appropriate and are focused on servicing our clients.

Our new business pipeline is growing well, with a good volume of work coming through now and for 2012. Following our recent refinancing we are comfortable with banking arrangements.”

Company Spotlight

Hasgrove Plc is a digital and communication services business with over 280 employees, servicing more than 300 clients. The group is made of up Amaze, Interact, and The Chase.

  • Amaze
Amaze is an integrated marketing and technology company that specialises in global digital strategy and communications, PR, and web-based business solutions.
  • Interact
Interact is a leading supplier of intranet software to optimise businesses, improving efficiency, increased employee engagement, better decision making, cost savings, and greater productivity.
  • The Chase
The Chase is a creative and design consulting firm based in the UK. 

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