Shares slump as Molins profits fall

Molins shares plummeted last week after the company warned of a significant fall in anticipated profits for the current year. It revealed a sharp drop in full-year losses last week and said orders for its cigarette making machinery were well below last year’s levels. Chief executive Peter Grant said tobacco machinery division sales were improving, […]

Molins shares plummeted last week after the company warned of a significant fall in anticipated profits for the current year.

It revealed a sharp drop in full-year losses last week and said orders for its cigarette making machinery were well below last year’s levels.

Chief executive Peter Grant said tobacco machinery division sales were improving, but added: ‘Without a sudden and unforeseen improvement in demand in this business the company will not achieve last year’s £9.1m operating profits.’

Molins shares dived 30p to 112.5p, a fall of 30%, and a fraction of its April 1996 level of more than £10.

Aside from the dip in the tobacco machinery division’s prospects, results for the full year were in line with analysts’ forecasts. Grant said the company was in better shape than a year ago, with new management and good resources.

A proposed share buyback could help with investor sentiment. The company will seek shareholder approval at the forthcoming AGM to buy back up to 10% of its share capital.

But Grant said he would consider all other uses of the group’s £10.9m cash resources before mounting a buyback.