What a difference seven weeks makes. On February 7 consumer electronics group Alba said trading conditions were "subdued". Now they are "very challenging".
As a result the company, whose brands include Alba, Bush and Grundig, says trading losses for the year to March 31 will be higher than market expectations.
In the current market climate, such a statement was always likely to see the company's shares walloped, and so it has proved. They have fallen nearly 20% to 65p.
Alba, which sold its 50% stake in Grundig but retains a licence to use the name in the UK, said it was taking steps to cut staff and reduce stock levels. It hopes this will save enough money to return it to profitability as quickly as possible, and allow it to develop new products in areas such as medical electronics. Earlier this year there was vague talk of a management buyout. It would certainly cost less now.
House broker Investec has tried to remain relatively upbeat. It has repeated its buy recommendation - on the basis that the company's assets are worth more than the current enterprise value - although it has cut its price target from 152p to 140p.
The broker said: "While Alba has taken out a considerable amount of cost over the last three years a continuously deteriorating trading environment over the same period seems to always have been one step ahead. Given current market conditions (materially worse than a year ago), Alba has this morning announced further cost reduction measures including removing additional headcount, lowering stock holdings and improving facility utilisation.
"As a result, we are widening our 2008 pre-tax loss forecast to £10m (from £6.7m pre-exceptionals) but at this point maintain our 2009 forecasts. The fledgling medical electronics business continues to trade well."
