Disruption at its tannery in Ethiopia has led leather goods producer Pittards plc (LON:PTD) to warn that its 2016 performance is likely to be lower than its previous expectations.
In October, the company reported that following heightened social unrest in Ethiopia, the Ethiopian Prime Minister had declared a state of emergency for six months.
In addition, the Foreign and Commonwealth Office had advised against all but essential travel to various regions including East Shewa where Pittard's Ethiopian tannery is located.
In a further statement released today, Pittards noted that travel restrictions have now been lifted by the Foreign & Commonwealth Office, although the state of emergency is still in place.
In October, Pittards said it did not expect any significant disruption to production from the situation.
However, the company today revealed that operations at its East Shewa tannery did actually suffer disruption, as some production was lost, and that production has not yet returned to earlier levels.
It said the lost production to some extent has been mitigated by undertaking production in the UK, but it will still hit results in the second half of the year.
The AIM-listed group said: “The prolonged depressed demand for leather has culminated in disappointing sales volumes in the last few months of the year. Together with the disruption in Ethiopia, the overall performance for the full year ending 31 December 2016 is likely to be lower than our expectations at the time of the half year results.”
But, Pittards, added: “The new management team is now in place and further progress has been made in the second half to simplify the Group to better position it for growth.”