Wagon warns on profits and asks for share trading suspension

The 90 year old automotive components group today (13 October) issued a profits warning and asked for trading in its shares to be suspended pending discussions with its lenders. In a trading update, the company that was founded at the end of the first world war to manufacturer railway freight stock said a shortfall in sales had led it to “constructive ongoing discussions with its lenders”. As a result, it board had requested that trading in Wagon shares be suspended with immediate effect, pending the outcome to the discussions. It added that due to present uncertainty over future production volumes at its car manufacturing customers, profits for the year to 31 March 2009 would be “materially below its previous expectations”. The Wagon update said the European automotive market had seen a recent and steep deterioration, with many car manufacturers significantly reducing their production schedules. These reductions were unprecedented in the industry both in scale and rapidity, it said. As a result, Wagon's revenues had weakened materially and will continue to do so in the coming months. Actions to reduce the impact of revenue shortfall on profitability and cashflow included job cuts, short time working and reductions in capital expenditure.