Advanced Power has issued a profit warning over sales of its ISDN components just three months after stating in its flotation prospectus that prospects were rosy.
The trouble is `both short and long-term,’ the company said.
The shock news, which coincided with a sharp profits downgrade by the company’s broker, Henry Cooke Lumsden, sent the share price plummeting. It was left trading at around 46p, against the 70p issue price of last November and a recent peak of 85.5p.
AP supplies transformers and high-tech components for the ISDN market. This seems to have turned sour suddenly in recent weeks as customers failed to take the shipments AP had budgeted for.
Roger Robinson, the managing director, insisted all was well at the time of the prospectus. He said he expected sales to slow rather than grow in the year to next August and profits to fall short of City expectations. But he believed ISDN sales would recover from next year.
Henry Cooke has switched its recommendation on the stock from buy to hold, and slashed its current year pre-tax profits forecast by £650,000 to £850,000. For next year it looks for recovery to the £1.3m achieved in 1995-96.