Stark warning from Dewhurst boss

The AIM-traded company was holding its annual general meeting on Tuesday.

At the meeting, chairman Richard Dewhurst said the weakness of UK demand highlighted in December's Annual Report had continued, and was showing no immediate signs of improvement.

"The strengthening of the pound against the euro has certainly damaged our competitiveness and encourages an increase in imports of packaged lift components from Europe", he said.

"The recent falling back of the pound from its peak levels is welcome".

Dewhurst said demand for the company's keypad products unexpectedly and rapidly slowed in the first quarter as well, though it did stabilise in January.

In markets where sales remained reasonable, Dewhurst noted, the company had come under greater pressure on margins exacerbated by adverse exchange rate movements.

"The lead time from order to invoicing of our products is generally very short, which also means the visibility of changes in demand is equally short", he explained, saying there was no significant improvement expected in the immediate future.

"In the medium term, it seems the encouraging pipeline of prospective projects we have been discussing with customers is converting to orders more slowly, but these projects have been delayed rather than cancelled, so there are signs of future recovery, although timing is uncertain", Dewhurst said.

The company was looking at a combination of lower short term demand, margin pressures and adverse exchange rate movements, and therefore revenue and profit in 2016 was to be materially lower than 2015, he explained.

"The group's balance sheet remains robust with net cash which can comfortably support our current dividends and working capital requirements", Dewhurst concluded.

At 30 September 2015, the company had net cash of £15m.