Shares in UK cake maker Inter Link Foods have more than halved today (21 March) as the company issed its second profit warning in two months.
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The food group warned investors in February that it would miss market expectations, making a loss for the full year ending 5 May. Today, Inter Link revealed that it is unlikely even to meet the revised expectations, stating that it will incur higher one-off costs than previously expected. Inter Link said it could see exceptional costs totalling GBP8m (US$15.68m), up from GBP5m originally anticipated. Chris Thompson, chief executive, said the company could make a loss of as much as GBP7m before exceptional costs for the year.
Shares in the food group went into freefall following the announcement, dropping 58.37% at 3.20pm (GMT) today to be valued at 74.2 pence.
“We were very focused on the fact that we’d got through a lot of our central distribution problems,” Thompson said. “Because we’d been so focused on the logistical side, as we’ve done a complete appraisal we found our margins were lower than anticipated and a deterioration in sales. Our eye has been off the ball.”
Inter Link, which makes Soreen malt loaves and private label cakes for supermarkets, said that its own label business “is still suffering from the competitive market conditions that have prevailed for 18 months”. Its branded business, however, remains on target for a successful year, the group said.
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