Hozelock finds that it never rains but it pours
First it was drought, now it is flood - either way, the British weather has not been kind to Hozelock, the country's biggest maker of garden hoses. Yesterday its shares plunged 78p to 280p, knocking pounds 19m off the company's market value, after it warned that the wettest June this century had hammered sales in what is normally the best selling season of the year. Not surprisingly, people have just not been buying hoses and the pain has continued into July, which with June, normally represents a quarter of the group's annual turnover.
Analysts wiped around pounds 4m from their profit forecasts for this year in the light of the warning, leaving expectations at around pounds 6.5m to pounds 7m. The latest black cloud to overshadow Hozelock has scudded in from a blue sky.
Earlier this year it was fears over the exceptionally dry spring which were hitting the share price, amid reports that the UK was "enjoying" the driest two years since the 18th century. The possibility that the water companies would have to reintroduce widespread hosepipe bans sent the shares spiralling downwards from a high of 488p in February, prompting the company to issue a statement in April that in fact it was enjoying "ideal selling conditions" of good weather with fewer water restrictions. Trading was said to be "substantially" ahead. All that has gone into reverse since June, which was "a diabolical month" according to chief executive David Codling.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments