Profit in the first six months of 2016 is expected to fall to £5 million, down from £14.1 million last year, meaning Brammer will come close to breaching covenants on its debt.
‘The UK started the month positively, but it has experienced a particularly weak performance over the last few days,’ chief executive Ian Fraser said.
Sales in May were also weak in the UK and Europe, Fraser adds.
Brammer is among the first domestic businesses to report sales performance since Friday’s vote to leave the EU.
But a source close to the company said the profit warning is not entirely the result of Brexit.
‘Essentially, the markets have been difficult anyway and they have not made a secret of that in previous announcements,’ said a source close to the company.
‘They were planning to see a pick-up in June and given the result on Thursday that’s just not happened.
‘Sales were particularly weak in the last few days but it is a result of the state of markets from May and it would be a bit disingenuous to say this is down to Brexit through and through.’
Brammer - total returns chart (20 year)
Fraser and the management team at Brammer are drawing up a recovery plan based on reducing costs, according to the company’s broker and adviser Investec.
‘Since the last update on 13 May, there has been a significant slowdown in sales across the group, especially in the UK,’ writes analyst Thomas Rands.
‘Group sales per working day in May declined 3% year-on-year with decreases in continental Europe and a 6% reduction in the UK.
‘The expected recovery in June from May weakness has not materialised, with the last few days seeing a further step-down in sales, especially in the UK.’
Rand is reducing full-year profit expectations by 62% to £10.3 million which gives an earnings per share estimate of 5.7p.
Forecasts by Rand imply Brammer will remain just inside its debt covenants, with a net debt/EBITDA ratio of 2.9, compared to the 3.0 required by lenders.
Rand's estimate on the debt ratio 'uses period-end foreign exchange rates whereas the bank covenant tests use average foreign exchange rates'.
Shares in Brammer rival Electrocomponents (ECM) fell 6.1% to 245p as investors see the scope for disappointment elsewhere in the sector.