Shares of Ashton-Under-Lyne-based healthcare and industrial firm Scapa Group fell about 30% on Wednesday after it published an update on current trading ahead of its financial year-end on March 31, 2020.
Scapa said it expects full-year revenue to be approximately £306 million, broadly in line with market expectations.
“However, trading profit is now expected to be approximately £28 million, significantly below consensus,” said Scapa.
“Healthcare revenue is estimated to be approximately £139 million, slightly ahead of market expectations and greater than last year despite the loss of the ConvaTec contract.
“Healthcare trading profit is expected to be lower than consensus, reflecting slower progress in reducing costs than expected at the time of the interim results.
“The group continues to focus on our pipeline of new programs as we leverage our technologies and capabilities to drive our organic growth and reduce the cost of operations.
“Industrial revenue is expected to be approximately £168 million, which is slightly below market expectations but has a material impact on group trading profit.
“This is primarily the result of adverse macroeconomic conditions, particularly in the automotive and specialty products markets.
“The group is focused on rigorous execution of the strategy as it continues to increase efficiency and convert its pipeline of opportunities to improve sales and margin performance.
“The group expects the macro environment to remain challenging in some of the industrial markets in which it operates.
“We believe that we have the right vision and strategy to capitalize on the outlook and opportunities for Healthcare and Industrial.
“Our Healthcare franchise is well positioned to benefit from the changes in the medical device market and whilst we expect the macro-environment to remain challenging, we will focus on cost reductions to drive the margin in Industrial to historical levels.
“Scapa expects to report its full year results on 19 May 2020.”