Focusrite PLC (AIM:TUNE) slumped 17% as it warned it was facing a very challenging environment in its content creation arm and had also been hit by destocking by a major reseller.
Sales for the year to June are expected to be in the region of £157 million, said the home recording specialist, in line with current market expectations with overall demand for its products described as resilient.
Underlying profits [EBITDA] however will be around £25 million due to the impact of shipping and logistics challenges as well as pressures on product margins.
“Product introductions were planned for the final quarter but the benefit of these has been offset in August by a significant reduction in stocking policy by a major reseller.
“In addition, port congestion in a number of regions has impacted logistics at the end of the year.”
Global shipping and freight costs have increased further in the second half of 2024 due to strong global shipping demand and ongoing issues in the Red Sea.
“The board now expects this trend in shipping and freight costs to continue into 2025.”
Panmure Liberum said the update was disappointing with the outlook tough.
One silver lining is “that despite the weak consumer-led macro environment, this premium-priced offering continued to outperform peers, which bodes well for when a recovery comes”.
Shares fell 61p to 287p on Wednesday.