Warning hits Nurdin shares

Shares in Nurdin & Peacock, the cash-and-carry group, fell 10p to 138p yesterday after the company issued a profits warning. The City was already expecting lower profits following costs associated with the reformating of some its stores.

However, N&P announced that some costs were higher than anticipated The company expects group profits for the year to December to be £15m-£18m, against the £32m achieved last year. City analysts had been expecting about £22m.

N&P has been rapidly changing its formats from traditional cash-and-carry operations to new formats such as Cargo Club, a members-only warehouse chain, and Trade and Business Warehouse, which carries office supplies.

N&P has incurred a total of £15m additional costs and write-downs. The conversion to the Trade and Business Warehouse format will cost £4.5m this year and the cost of integrating 10 branches of M6, the cash and carry chain acquired in May, will be £1.5m.

The start-up and marketing of the Cargo Club format in three new branches resulted in a further £7.5m costs, with shrinkage, a retail word for theft, and extra stock write-downs adding a charge of £2.7m.

Cargo Club was launched with great fanfare in 1993, claiming to offer discounts of up to 20 per cent on high street prices. However, the concept has been slow to catch on.