(Alliance News) - Trifast PLC shares plummeted on Monday, as it warned annual profit would fall well below market expectations, and its chief executive made a shock departure.
Shares in Trifast were down 45% to 50.80 pence in London on Monday morning.
The Uckfield, England-based industrial fastenings firm warned that "significant" destocking from one of its Asian manufacturing customers has hurt its operating profit.
Since its half year results in November, the firm noted some volatility in demand patterns, due to macro-economic conditions.
As a result, it now expects adjusted pretax profit for the year to March 31 to be around GBP9.0 million. This is below current market expectations of GBP14.3 million by 37%, according to company-compiled consensus.
Underlying pretax profit in financial 2022 was GBP14.2 million at constant exchange rates, or GBP13.8 million at actual exchange rates.
In November, the firm said its focus for the second half was to improve its operating margin through pricing and cost saving actions.
"Whilst progress has been made in both areas, the benefits to operating profit (before the negative impact of FX), have been more than offset by the effects of the destocking in Asia," Trifast said on Monday.
More positively, however, the company recorded further growth in revenue, led by its European and North America businesses. It won another GBP10 million in contracts, bringing to year-to-date total to GBP22 million.
It expects annual revenue of GBP243 million, which is GBP1 million greater than market consensus. It would also be 11% ahead of GBP218.6 million the year before.
"Whilst the short-term shortfall in the group's performance is disappointing, given ongoing contract wins, pricing increases and the roll out of key initiatives, the board continues to believe in the medium-term potential of the Group and continuing to update shareholders on progress," Trifast commented.
Chief Executive Officer Mark Belton resigned on Saturday with immediate effect, after 23 years at the firm.
Non-executive director Scott Mac Meekin is taking up the role of interim CEO immediately.
Meekin will offer the "right balance between business continuity and change", said Non-Executive Chair Jonathan Shearman.
By Elizabeth Winter, Alliance News senior markets reporter
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Trifast (TRI)