Premier Farnell shares dip

SHARES in electronics group Premier Farnell slumped following its second profits warning in two months.

The company, which manufactures and distributes specialist electronics items, took an axe to its dividend after warning that profits in the second half of the year would be even lower than it forecast in June.

The group slashed its dividend by 40pc to a miserly 2.6p a share after reporting that first-half profits slid 16pc to £30.6m.

Chairman Val Gooding defended the decision, saying: ‘The board recognises the significance of the dividend to our shareholders, but also the importance of it being sustainable and progressive.’

The group also warned that annual profits are now expected to be in the range of £73m to £77m as the performance in the second half is likely to turn out to be ‘lower than previous expectations’.

Shares, which have lost 40pc of their value in the last 12 months, fell by 16pc yesterday to 112p.

The company has announced it will sell its firefighting equipment division Akron Brass because ‘although an excellent business, [it] does not fit strategically’ with the group’s plans.

The firm had launched a rescue plan in July aimed at putting it on a surer footing.

Interim chief executive Mark Whiteling said the company had seen a slowdown in the UK and North America, its core markets.

He said that the ‘slowing momentum’ had carried on into the second half of the year, and said the firm needed to refocus its core distribution business in order to ‘improve our performance’.