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Seraphine blames war in Ukraine for second profit warning in four months

·2-min read
Seraphine has now kicked off a review of its business  (Seraphine)
Seraphine has now kicked off a review of its business (Seraphine)

Shares in maternity wear retailer Seraphine crashed 40% this morning as the company blamed Russia’s invasion of Ukraine for its second second profit warning in four months.

Seraphine said consumer sentiment had weakened “across Europe” as a result of the war, adding that recent trading had also been “impacted by the cost of living crisis.”

Seraphine has not been immune to these sector-wide pressures,” the company said.

The business floated on the stock market last summer and has delivered a string of bad news since then. It admitted to supply chain issues in September last year, with stock arriving by sea from China hit by delays, and said in February that rising costs meant profits for the year would be “significantly” below expectations.

Today, Seraphine said it had delivered “strong year on year revenue growth” of 33%, with 52% growth in North America where the business “sees further significant opportunities for value creation”.

But earnings for the year are now set to be around £3 million, below previous guidance of £4.5 million.

CEO David N Williams said he was “disappointed that a combination of internal and external factors has affected the outturn for the year”. He expects “consumer sentiment to remain subdued in the short term”.

He added: “We are confident in the strong underlying fundamentals of the business and our ability to scale up and deliver growth in the medium term.

“We will also benefit from the steps we have taken to strengthen our executive and operational management capability across the team.”

Finance head Lee Williams has kicked off a full review of the group’s forecasting and financial management, looking for areas of improvement.

Seraphine is also raising the price of its high-end products, while keeping entry-level products competitive to protect sales.

Shares sunk 19p to 30p. The company went public at 295p per share last July.

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