Haynes Publishing warns on FY profit, begins restructuring

17th May 2016 15:30

(ShareCast News) - Haynes Publishing's shares plunged more than 12% after it warned full-year pre-tax profits before exceptional costs will come in up to 30% below market views for £2.6m, and also outlined restructuring and job-cut plans.Haynes cited a weak Q4 in its US & Australian markets, noting a more positive position in UK & Europe, with the consumer and professional businesses performing in line or ahead of views. It expected a total of 41 job cuts across its US, Australian and European operations, about 17% of the workforce.Directors also expected to incur one-off exceptional costs in relation to unsaleable inventory reserves in the US and the implementation of the restructuring programme of close to £4.0m, about two-thirds of these having a direct cash impact on the business.The company added that with falling print-manual volumes it was no longer commercially viable for it to maintain its own printing and distribution facility in the US."Accordingly, meetings have recently been held with employees from its Nashville print and distribution facility to inform them that their roles will become redundant when the facility closes," Haynes said in a statement."It is the Board's intention to use the substantial savings which will accrue to the business to accelerate the development and marketing of its consumer and professional digital platforms."The benefits accruing from outsourcing the group manufacturing will not be realised until current inventory levels flow through, which is not expected to occur until early 2018."Haynes' board had also taken the decision to close its Swedish business and service its Scandinavian customer base from the UK.