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Profit warning for William Sinclair

SHARE TIP UPDATE: Losses widen at garden supplies business William Sinclair, the dividend shrinks and we retain our recommendation. Sell.

The coldest spring in more than 50 years led compost and garden products business William Sinclair (SNCL) to warn on full-year profits following a 22 per cent fall in first-half sales, which turned a £400,000 profit before tax last time into a £1.8m loss. The interim dividend was cut by 21 per cent to 1.4p and net debt has soared to £15.8m from £9.5m last year.

IC TIP: Sell at 125p

It wasn't all doom and gloom, though. Sales of the group's new SuperFyba peat alternative are set to be above forecast volumes, and development of a new facility in Ellesmere is going to plan. Peter Rush, the new chief executive, thinks revenues are likely to be slightly ahead of last year's £48.2m.