Wogen, the global specialty metals and minerals trader guided by CEO Allan Kerr, has become the latest in a long line of smaller companies to warn on profits.

In an update, ahead of annual results to September slated for release next January, Wogen flagged up the fact that ‘lack of confidence in financial markets and world economies’ had hit ‘a number’ of its key markets.

‘Materially’ lower liquidity, it explained, had significantly lowered metal prices and led to a rise in ‘counter-party risk’. As a result of inventory write-downs it will now need to make, annual results will come in ‘materially’ below those of the prior year.

‘In the last two months’ lamented Kerr, ‘the collapse in the price of many of our traded metals has become extreme.’ However, he added that in its 35-year history, the well-funded company had successfully traded through market corrections.

In an earlier October update, Wogen alerted the market to expectations of a flat financial performance year on year, with financial markets tightening, while emphasising the strength of its balance sheet.

The picture has changed since the summer, when interim results to March revealed 19.3% growth in profits to £2.3m, on turnover up 6.3% at £113m, buoyed by good trading conditions for specialty metals, fuelled by demand from developing markets. Indeed, the half-time figures reflected ‘outstanding’ progress in the Far East, as well as rapid growth in turnover in the Middle East, Brazil and Ukraine.

Given present uncertainties, shares in Wogen, which have plummeted from a 90.5p 52-week peak, are best avoided short term.

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Wogen	AIM	£10.1m	22.50p	0.00p
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