Stadium Group plc (LON:SDM), the wireless solutions and power supplies specialist, still expects profits to grow by ‘high single digits’ this year despite the loss of a significant client.
Full year results for 2016 will be slightly below market expectations as result, said the electricals group.
The customer, which operates in the telematics space, will move product design in-house and manufacturing elsewhere.
Broker N+1 Singer now forecasts that Stadium will generate sales of around £52mln in 2016, against its original forecast of £62.1mln, and a profit before tax of £4.4mln, previously £5.5mln.
“We are clearly disappointed to lose a significant wireless customer during the period and there's no doubt that this sets us back temporarily in terms of our ambitions for growth,” said chief executive Charlie Peppiatt.
“However…we are confident that we now have the teams in place to drive the significant growth expected in 2017 and beyond.”
Stadium expects to deliver a “materially higher profit” in the second half of the year, due to the seasonality within the business, compounded by a strong order book.
Sales in the group’s electronic manufacturing services business – which it is looking to move away from – are also showing a quicker than expected decline, although this has been “largely off-set by cost reductions and ongoing efficiency improvements.”
Recent acquisition Stontronics continues to perform in line with expectations.
Chief executive Charlie Peppiatt, finance director Joanne Estell and chairman Nick Brayshaw bought a combined 32,000 shares at a price of between 79p and 80p.
Shares were down 30p, or 27%, to 80.16p.
-- Update: Directors' dealings --