(Alliance News) - Connect Group PLC on Wednesday lowered its financial 2020 profit expectations as the distributor feels the effects of the coronavirus.
Connect said core trading remains relatively robust despite the disruption to the UK economy. Both the company's Smiths News and Tuffnells units were trading in line with expectations, it added.
The company said UEFA's decision to postpone the 2020 European Football Championships this summer to 2021 will hurt the timing of sales of football magazines and trading card. As such, the company expects this to hit profit to the tune of GBP1.0 million to GBP1.5 million.
The company noted that as a consequence of international measures to contain the pandemic its airline and travel supply business Dawson Media Direct has seen a marked softening of demand from its clients.
"Whilst it is too early to determine the precise impact, our current expectations are that DMD will be at or around breakeven in H2 2020, representing a reduction in full year profit of around GBP1 million," the company said.
In light of the coronavirus outbreak, Connect said it expects adjusted profit for financial 2020 to be lower. The company predicts the figure to fall by GBP2.0 million to GBP2.5 million. In financial 2019, adjusted pretax profit came in at GBP23.2 million.
"While it is not possible to determine the impact of any further measures to contain the spread of coronavirus, the group continues to monitor the situation carefully and will update the market in due course," the company added.
The stock closed up 2.4% at 14.14 pence on Wednesday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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