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The warning signs have been ominous for Metalrax for some time and the company has duly issued a trading statement confirming that a retail and construction slump has hit its business hard.
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Since the end of October, the company has experienced a rapidly deteriorating market, as the global slowdown has gathered pace. All of the group's business including its automotive, Stackright building systems and retail cookware divisions experienced a sharp slowdown, and profits will be below last year's level. The company is also cutting 27 per cent of its workforce and is reviewing the parts of its business most affected by the downturn.
The statement validates our recent sell recommendation (8.75p, 28 Nov 2008) and the full-year results could make grim reading. Sell at 7p.
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