LPA Group warns near-term prospects hurt by rescheduled work

Electronic connector manufacturing firm LPA Group said on Wednesday that its medium and longer-term prospects had been enhanced, but stated it had come at the expense of the near-term.

LPA said Covid-19 had led to the rescheduling of certain work out of the current financial year and into later periods, something it said "could not have been foreseen", but highlighted that no business had been lost as a result of the pandemic.

"We have been victims of our own success in managing the business successfully through the UK lockdown. Other parts of our customers' supply chains have not performed so well and, as a consequence, our customers have production issues caused by lack of supply of parts needed to run their production lines," said chairman Peter Pollock.

Following programme reviews by customers, further supplies of many of the parts the company manufacture were also now not expected to be required for several months.

"Approximately £2.7m of output will be delayed from the second half of this financial year into later periods, and strong action has been taken by management to mitigate the impact," said Pollock.

However, the group's chairman stated that as its customers' production recovers to normal levels, "equilibrium should be restored" and its sales output looked set to recover.

"We continue to have a very strong order book and a strong balance sheet and expect to remain profitable and cash generative through the current financial year. We will keep our dividend policy under review," concluded Pollock.

As of 1010 GMT, LPA shares were down 13.74% at 73.75p.