Molins drops on tough markets and order delays

28th Aug 2014 16:11

Shares in Molins sank after the cigarette machinery maker said it had taken a hit from tough markets in the Middle East and eastern Europe and delayed orders.The stock dropped 24.5p or 15.4% to 135p as Molins said its tobacco machinery division faced reduced order demand and after-sales business.Two large orders to the Middle East and eastern Europe, which were expected to have been delivered in the period, were deferred. However, the company said its scientific services and packaging machinery businesses progressed well, with sales in local currencies up by 4% and 9% respectively on the prior period.The group's underlying profit in the six months to 30 June fell to £0.6m from £1.5m and it made a statutory pre-tax loss of £100,000 against a profit of £700,000 a year ago. Sales dropped to £40m from £47.8m a year ago. Molins kept its interim dividend unchanged at 2.5p.Chief executive Dick Hunter said the group's first half performance was broadly in line with management expectations.But he added: "As in previous years, the group's full-year trading performance will be significantly weighted towards the second half."The board is mindful of the strength of sterling and current market conditions for the tobacco machinery division."The prospects for the scientific services and packaging machinery divisions continue to be encouraging. We continue to pursue our growth initiatives in all divisions."PW