Uniq Plc, which supplies prepared meals to retailers such as Marks & Spencer Group Plc, expects a second-half loss after sales deteriorated in the U.K. and France.
Cash-strapped consumers are opting for discount products, leading to ``disappointing'' profit margins, the Gerrards Cross, England-based company said today. Uniq fell as much as 35 percent in London trading to the lowest since at least 1989.
Uniq, who provides Marks & Spencer with its premium Gourmet to Go range, is being forced to cut prices on products as consumers feel the squeeze of the credit crunch on their incomes. The food producer has also been hit by increased prices for vegetable oil, transport costs and fish.
``We expect the negative market trends to continue and, as a consequence, the board now anticipate that the group will incur a trading loss in the second half as a whole,'' Uniq said.
The company said revenue for the third quarter was little changed from the same period last year. Sales rose 1.7 percent in the U.K. and declined 6.8 percent in France.
Uniq closed down 42 percent, or 32.5 pence, to 44.5 pence in London trading, the lowest value since it begun trading in September 1989. The stock has fallen 76 percent this year, compared with larger rival Northern Foods Plc's 39 percent decline.
The U.K. division will deliver a profit in the second half at a ``much lower level'' than last year, Uniq said. Earnings for the so-called northern Europe unit are expected to improve, led by revenue from the Netherlands, the company added.
Uniq, who makes sandwiches for Tesco Plc, halted its dividend payout in July to conserve cash for investment.
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