Laird plunges to five year low after profit warning

Although trading at Laird improved slightly in the third quarter, helped by currency shifts, it warned profits for the full year would be lower than expected due to delays in the mobile devices cycle and increased margin pressure.

This made for a "very challenging trading performance" for its Performance Materials (PM) arm in the three months to 30 September, which has led new chief executive Tony Quinlan to cut full year guidance for underlying profit before tax to around £50m, with the analyst consensus nearer £75m.

Sales in the quarter rose 29% to £207m thanks to currency movements, with underlying revenues down 4%, meaning for the year to date sales are up 20% to £560m on a reported basis.

Management have begun to cut costs and manage cash, with a focus on improving the PM division, though the year end ratio of net debt to EBITDA is expected to remain within covenant limits of 3.5 times.

"We are very disappointed by these adverse developments in the mobile devices market for our Performance Materials division, at a time when other parts of the business continue to perform well," said Quinlan, who was promoted from finance director in August after former CEO David Lockwood jumped ship.

"We are confident that the actions we have taken will stabilise and improve the business."

Looking forward to 2017, Quinlan said the work to improve the operating model was "on track".

"This, together with the Novero turnaround, as well as the positive momentum in our automotive business, will improve performance next year and beyond."

Shares in Laird were down 46% to 166p by 0835 BST on Wednesday, their lowest level since early 2012.