Enodis, the UK-based food equipment provider, suffered a share price fall of more than a quarter yesterday after it said that current weak market conditions were likely to persist "further than we had originally expected".
It had previously thought business would pick up "early next year".
Andrew Allner, chief executive, said he was surprised by the severity of the fall in the shares, from 60 pence to 44 pence. He also pointed to the rest of the statement accompanying third-quarter results, which said the group was confident it would expand sales and market share while reducing costs.
Further, the refinancing of the company, including a £70.3 million (€110.8m) rights issue, and disposals had cut net debt from €365.9 million at the end of the last financial year on 29 September 2001 to £225.7 million at 29 June this year.
However, the group had decided to recognise the problems at lossmaker Kysor Warren, which makes display cabinets for supermarkets, by writing off its £48.9 million of goodwill.
Other exceptional items pushed the group into a third-quarter pre-tax loss of £89.9 million, compared to profit of £30.8 million including a £21.9 million exceptional gain in the previous year.
Sales in the quarter, excluding businesses sold, fell from £228 million to £197 million. Losses per share were 23.4p (earnings 8.9p).
In the first nine months, sales from continuing operations fell from £649 million to £587 million, while pre-tax losses rose from £8.5 million to £98.1 million after exceptional charges increased from £24.4 million to £103.3 million. Losses per share were 30.1p (5.1p).
Allner said that the group's main business, supplying food service equipment such as cookers and ice-makers to large North American restaurant groups, including McDonald's, was performing "robustly" in a weak market.
In Europe - especially the UK - and elsewhere, markets were weak but the business was profitable.
Schroder Salomon Smith Barney slightly reduced its forecast for the year ending 30 September to profits of £27 million, before tax and exceptionals.
For 2003 it is forecasting profits of £43 million.