Densitron Technologies has been hit by a profit warning coupled with concerns over its exposure to a lease liability that is going to mediation.
House broker Westhouse Securities had pencilled in full-year pre-tax profits of £1.62m on revenues of £26.16m.
However, the company revealed that although profits will be above last year's figure of £1.06m, they will not meet Westinghouse's estimates.
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The company commented: "The primary cause of this is certain orders being received later than anticipated as a result of which the Directors now expect the deliveries associated with these orders, and therefore resultant sales, to be delayed into 2013."
Nevertheless, the company emphasises that orders booked in the first 9 months of the year remain strong and are in excess of 10% higher than those booked in the same period in 2011.
As regards the leasehold liability, estimated to be around £370,000, this relates to a lease signed 25 years ago for a property that was used by a subsidiary of Densitron that has since been sold. Densitron will now undertake mediation with the fund manager (Ashtenne), that owns the property and its former subsidiary that rented it, Fenograph, in the interests of progressing the matter in an expedient manner.
It is hoped that this will enable the property to be re-marketed, after which the historic liability can be settled.
CM
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