Direct Message sends wrong signal

By NICK GOODWAY FOR MAILONLINE
Updated:

 

SHARES in advertising hoardings and street furniture maker Direct Message more than halved after it issued its second profits warning since its demerger from aerospace engineer L Gardner in February.

The shares, which began trading at 27 1/2p on 1 February, tumbled from 9 3/4p to 4 3/4p, slashing the market capitalisation of the company to £2.9m. That compares with the £5m the company raised through a share placing in February.

Direct said there had been a rapid deterioration in order expectations, particularly from its outdoor advertising customers. A spokesman said the outdoor industry had panicked and orders in May had 'fallen off a cliff'.

He said the group would be able to service its £20m debt and still expected to make a pre-tax profit in the year to end-August. But analysts have already slashed forecasts of £1.38m for the year. The spokesman said the firm hoped to issue a fuller trading statement in about a week.

The demerger was handled by nominated adviser English Trust and stockbroker Seymour Pierce.

Direct said that given its 'relatively high level of borrowings' it would cut costs 'to keep both manufacturing and administration expenses under tight control'.

Most watched Money videos