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Wagon suspended as sales slump

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    Date: Monday 13 Oct 2008

    LONDON (ShareCast) - Car components group Wagon suspended its shares this morning as it revealed talks are underway about its financial position after a slide in sales.

    "The European automotive market has seen a recent and steep deterioration, with many of the major OEMs significantly reducing their production schedules. These reductions have been unprecedented in the industry both in scale and rapidity, " it said.

    As a result, revenues have weakened materially and current indications are that they will continue to do so in the coming months.

    "The shortfall in sales has impacted the current capacity of the group's principal invoice discounting facility, and the group is therefore in constructive ongoing discussions with its lenders and its principal shareholder to address this situation, including access to other existing group facilities," Wagon said.

    It is cutting its cost base through job cuts, short time working and reductions in capital expenditure and working capital, but profitability for the year to 31 March 2009 will be materially below its previous expectations.

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