SpaceandPeople shares collapse after early profit warning

AIM-listed SpaceandPeople saw its share price sink by over a third on Thursday after the retail, promotional and brand experience specialist issued an early profit warning, saying that profits would have be half the amount analysts were expecting.The group said it has experienced a 12% shortfall in revenues in the first quarter, compared with management's forecasts, and this trend will likely continue for the rest of the year.The problems lie in the company's core UK and German promotions and retail businesses, with a weakness in the UK and delays in Germany affecting trading.SpaceandPeople said pre-tax profits in 2014 will be £1.4m lower than previously forecast at just £1.5m after one-off costs of £150,000. Revenue guidance for the year has been cut from £18.6m to £18.2m."The board is confident that growth in revenue in the core business will resume towards the end of 2014 as new business wins gain traction and for 2015 we are forecasting modest revenue growth, along with the reorganisation and cost reduction plan that the company has already implemented. This will deliver a forecast pre-tax profit for 2015 of £2.0 to £2.5m."The stock was 39.8% lower at 79.75p by 14:04 on Thursday, with Cantor Fitzgerald providing a drag after cutting its rating from 'buy' to 'sell'.