The 2007-08 profit forecast for Armour Group has been cut from £4.9m to £3.5m.
The shares slumped 6p to 16.5p, which puts the shares on less than five times earnings for the year to August 2008. The prospective yield is more than 4%.
The consumer electronics products and accessories supplier says that, after a strong start to the year, trading conditions became more difficult in third quarter. May was particular poor although June was better. The home entertainment side continues to perform well but the automotive electronics side has been hit by delays in orders and reduced incentive programmes by car makers.
Management is cautious about next year as well. As new house building declines this is likely to hit the home entertainment division. Armour should benefit from the lower cost base of moving four warehouses to one site.
House broker FinnCap’s 2008-09 profit forecast has been cut from £5.4m to £3.5m.
Armour will be the sole distributor of Directed Electronics brands in the UK. The products are mainly related to automotive security and they should add £1.5m to annual turnover.
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