Yates issues profits warning

Yates Group has warned that its profits for the current financial year are likely to fall short of expectations.

The group blamed "competitive market conditions" for worse than expected trading during the summer at its core business, Yates's Wine Lodges.

As a result, it has been forced to introduce discount prices on Friday and Saturday nights as well as during the week. This has led to a reduction in gross profit margins.

Yates said it expected margins to recover during the second half of the year, but warned they were not expected to reach earlier levels.

Sales volumes, however, were expected to rise as a result of the lower prices being charged.

The company said its results for the current financial year were "unlikely to exceed those for the year ended 2 April".