LONDON Abacus Group expects profits before tax, exceptionals and goodwill for the year to 30 September 2005 to be not less than £8.0million, up to 25% below consensus forecast.The profit for 2004 was £10.0million.
The distributor says it has continued to grow market share in the UK but, as previously reported trading conditions have deteriorated in the current economic climate and show no signs of near term improvement. In particular, delays have occurred in the calling-off of stock against a major contract in the Trident display business.
The company is addressing the more difficult trading environment affecting the group including strengthening the management team in Trident with the appointment of Tim Merricks as operations director. He joins Trident from Nikon UK where he has been responsible for logistics and project management.
The Abacus operations in the Nordic region have been reorganised resulting in the closure of offices in Finland and an overall reduction of 30 staff in the Nordic region to 60. The reorganisation costs of £0.7million will be treated as an exceptional charge in 2005.
A further exceptional charge will be recognised in 2005 relating to the introduction of the new Restrictions on Hazardous Substances (RoHS) Legislation in the EU, effective from 1 July 2006. The company says the charge to be made in 2005 has not yet been fully quantified, but is likely to be approximately £3.5million, and represents the cost of writing off stock considered unsaleable due to non compliance with RoHS.