The Accell Group of the Netherlands said it expects to record a 25-35 percent increase in net profit from ordinary operations in 2007. Previously this was around 35 percent. The possible 10 per cent profit reduction led a massive drop in Accell's share price today.
Accell shares fell 13 percent, bottoming out at 25.12 euros, valuing the company at 243 million Euros.
René Takens, CEO of Accell Group said: “Dealers’ sales were lower during the summer months, due to the wet weather, particularly in the Netherlands. The availability of bicycles from the new model year is affected by delayed deliveries from Shimano and a number of larger frame suppliers.
"The new collections for the coming season have been well received and the order portfolio is also well filled. Based on the expected and largely organic operational profit increase of 25-35 per cent, 2007 will be another successful year for Accell.”
The profit forecast does not include the provision announced with the first-half results, which was taken as a result of a court ruling relating to a 4.6 million Euro fine by the Dutch competitive trading ministry, Nma. An appeal has been lodged against this court ruling.
According to Bloomberg, Rabo Securities in Amsterdam cut Accell to 'hold' from 'buy.'
Frank van Wijk, an analyst at SNS Securities in Amsterdam, said:
"We are more cautious on the impact of the delay of bicycle parts in 2008, because the scarcity of parts could limit top-line growth."