Slow sales force Legend to revise full-year figures
- 21 January, 2008 14:43
ASX-listed Legend Corporation (ASX: LGD) has warned investors it will not meet its full-year revenue guidance figures, citing invoicing delays and flagging memory sales as key reasons.
Legend originally forecast its full-year EBIT result to June 30 would range between $12.1 to $14.7 million, while its net profits should hit $6.7 to $8.4 million. The company is now in the process of redrafting its forecast.
CEO Bradley Dowe, said some of its classic product lines, such as conductors and memory components, were underperforming. He claimed the slow uptake of Microsoft's Windows Vista in the local market was one of the major reasons.
"Our customers tell us that their business is dramatically below expectations due to a number of issues, which is pretty much in sequence with issues relating to Windows Vista in the marketplace," he said. "The bigger issue that we are seeing is the slow down across the ICT channel. We've seen a downturn since the introduction of Vista and the uptake in mature markets such as Australia has been fairly slow."
Dowe also blamed invoicing delays with customers for Legend's woes.
"We have had some invoicing delays from some of our major clients for medical electronics and semiconductor products," he said. "That's not lost business; it's just a delay in delivery. It's not occasioned by ourselves, it's just the customer has pushed his order out a bit, which has an important impact on our business because these products have already been manufactured and are waiting to be delivered to clients."
In a bid to reduce operating costs, Legend has consolidated some of its warehousing operations along the east coast and will establish a bigger distribution facility in the Sydney suburb of Seven Hills. The new location spans about 10,500m and will be operational in June.
The company has also consolidated two factories in Taiwan. Dowe said this would not affect the local market.
"There will also be backup and much smaller facilities in Perth," he said. "We are bursting at the edges in our current facility and that will lead to additional hiring of about 10-20 staff in warehouse and logistics areas.
"Coming into 2008, we would be seeing some return to stronger numbers in terms of deliveries into the local market place."
In other news, Legend company director, Simon Forth, will be retiring from his post, effective from January 29. The company has hired Ian Fraser as non-executive director.