Building products supplier Alumasc has warned investors that its profit for the year will be 15-20 per cent lower than expected.
In a trading statement released this morning, the company cited the “fallout from Carillion” and bad weather as hitting the company’s trading activity in the first three months of 2018.
These factors, combined with a reported slowdown of activity in some sectors, will drag turnover 7-9 per cent lower than expected for the year to 30 June 2018, with pre-tax profit down 15-20 per cent.
Alumasc’s shares dropped 10.7 per cent this morning on the news.
This morning’s profit warning was the second the company has issued in 2018.
In March the company said it was seeing delays in contractor customers taking on new work.
This slowdown in new work was then exacerbated by Carillion’s collapse in January, the company said.
Commercial new-build work was highlighted as a particularly weak sector, with “broader economic and political” uncertainties hitting demand.
In Alumasc’s half-year report for the six months to 31 December, the company reported revenue down 5.9 per cent compared with the same period of 2016 to £47.8m.
Profit before tax was down 15.7 per cent from £3.6m to £3m.
The sector’s difficult start to the year was reflected in the Construction Products Association trade survey for Q1, which showed the majority of heavy-side manufacturers – covering output such as concrete and steel products – reporting a decline for the first time in five years.
Light-side manufacturers – producing items such as M&E products – reported the lowest level of sale growth for two years in the same quarter.
The CPA has estimated that £1.5bn of construction output was wiped out in the first quarter of the year, partly due to Carillion’s collapse and bad weather.