Investors have lost their appetite for Patties Foods (PFL) after the frozen pie supplier issued a profit warning this morning.
Management said the current full year net profit would come in at around $16.6 million, implying a weak second half net profit of $7.5 million.
Hang on for a string of broker downgrades as this is the second time the once favoured defensive small cap has disappointed on the earnings front.
The company recorded a 12.7% drop in underlying net profit to $9.5 million for the December half, but said at its November annual general meeting that the second half of 2012-13 would at least match the net profit in the previous corresponding period.
That clearly isn’t the case as this half will be around 14% weaker than the same period last year.
What is alarming is that the weak trading conditions afflicting its first half performance have likely intensified.
Management blamed competitive pressure for eroding margins and disruptions caused by the installation of new robotic packaging equipment for its first half woe. This time they added softer than expected market conditions to the mix.
The stock crashed 5.7% to $1.40 in early trade.