Jessops hit by warning on profits

Jessops has been surprised by rate of decline in digital camera sales

Photographic retailer Jessops has slashed its profit estimates after seeing sales of digital cameras fall.

The camera retailer said it now expected profits for the year to September to about £6.5m, down by more than £10m on previous estimates.

Jessops said that sales had continued to worsen in January following a difficult Christmas trading period.

The profit warning led to Jessops shares losing more than a quarter of their value.

In afternoon trade, the shares were down 31.75 pence, or 30%, at 74.75p.

Sales down

Jessops said the digital camera market had continued to deteriorate during January.

It is very disappointing to have to revise our forecasts down so significantly Chris Langley, Jessops chief executive

It said industry data for last month had shown that, for the UK market as a whole, digital compact camera sales were down 10.8% by value, memory card sales were 14% lower and sales of camcorders fell 16.8%.

Digital SLR camera sales grew by 14% across the UK market, but this was down from the 30%-plus monthly sales increases seen during 2006.

Jessops said that its like-for-like sales - which strip out the effect of store openings and closures - had fallen 3.4% over the past seven weeks.

Chief executive Chris Langley said the company had previously indicated that it expected the digital compact camera market to peak this year, and had seen demand for these cameras decline over Christmas.

"What has surprised us from this latest data is the speed with which this market appears to have deteriorated and it is very disappointing to have to revise our forecasts down so significantly," he said.