PIC shares fall 25% after warning
SHARES in pig breeder PIC International plummeted by 25% yesterday (Monday) after the company said it expected to do no better than break even in its second quarter.
The company said group operating profit for the first quarter was £4.1 million, but since October its performance had deteriorated sharply.
Profits might be depressed by a further £2m because of softer prices for feed and record lows in pig slaughter prices.
Analysts responded by lowering their forecasts to between £1m and £2m. Last year, PIC reported pre-tax profits of £14.3m at the half.
The group said trading conditions in its US business had deteriorated, with slaughter market prices about 28% below the level at the end of October. Prices were 30% off break-even for the average pig producer in Europe.
Andrew Allner, finance director, said the very low prices were caused by overproduction, not by a fall in consumption or demand.
This is the second time PIC had issued a profits warning in the space of a month.
The group previously said that operating profits for the first half to December would halve from last years figure.
- Market expecfts gloom from PIC, FWi, yesterday (14 December, 1998)
- Financial Times 15/12/98 page 26
- The Daily Telegraph 15/12/98 page 24