Quarto profit to be significantly lower than expectations
Source - SMW
The Quarto Group, an illustrated book publishing group, has warned that full year adjusted profit before tax is expected to be significantly lower than the board's expectations.
The company said solid second half trading more than recovered the first half loss but will not be enough to meet its expectations for full year profits.
Although second half revenue is expected to be higher than the second half of 2016, full year revenue will be marginally lower.
Year-end net debt is expected to be lower than net debt at 30 June 2017 but higher year on year.
The group highlighted the tough retail environment, finance team restructure and unsolicited offer to purchase the group.
The board will not be recommending the payment of a final dividend.
Marcus E. Leaver, chief executive, said: "2017 was headlined as a transitional year, selling our non-core businesses to become a pure-play publishing business. Many aspects of the execution of this strategy went well, some less so; the re-structuring of the finance team and the unsolicited offer for the group were significant additional challenges.
"The resilience of the total business is reflected in a strong H2 trading performance which will more than recover the H1 loss, although not enough to claw back to earlier board expectations for the full year.
"Whilst we have successfully transformed the business in the last few years, the competing pressures of servicing our debt, paying dividends, and investing in the core business currently inhibit our ability to grow."
At 9:26am: (LON:QRT) Quarto Group The Inc share price was -25p at 121.5p