RNS - deteriation in trading30 Nov 2015 19:25
From the RNS issued after market close:
"Trading Update
We reported in September that the Group was operating in line with management's expectation and that this performance had been achieved against an environment of challenging market conditions for commodities, energy and scrap metal. We noted that we had not seen a slowdown in the level of activity in our business, but we would keep the market informed if we did see a deterioration.
Over the last month or so market conditions have materially deteriorated in the commodity sector in which Brady's clients operate. Several of the major commodity trading companies have reported deteriorating trading conditions, issued profit warnings alongside announcements of cost cutting or restructuring measures. The net result of this for our business is that customers and new prospects are lengthening buying cycles.
In our September update, we reported a healthy sales pipeline that more than covered the sales needed to complete the full year in line with market expectations. Whilst some of those opportunities have been converted into contract wins, including 5 cloud deals, we have seen a prolongation of the time required to convert the pipeline into the sales that we anticipated. Whilst most of the opportunities that were there in September are still good prospects, they will not be converted into sales in this financial year. As a result, revenues and EBITDA for the financial year ended 31 December 2015 will be materially below market expectations. The Group's balance sheet remains healthy with cash in excess of £4 million and no debt.
The Board has initiated a cost reduction exercise of £1.7million to improve profitability in 2016 over 2015."
At least it gives all an equal opportunity to trade first thing tomorrow rather than issue it during work hours and catch many out.
Good luck
CM
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