'Over-reaction' on Ultrarame

The company told the Stock Exchange on Friday that profits for the full year were likely to fall to £25.3 million - about £2 million below market expectations.

Investors reacted badly to the warning -- the second in six months -- and the share price has fallen from £3.28 per share to just £2.32.

The collapse will have come as a blow to many of Ultraframe's 600 employees who bought shares in the company when it floated on the market in 1996.

The company's financial public relations advisers, Binns & Co, admitted the market had reacted badly to the trading statement.

"Any company putting out a statement like that expects to see its share price fall sharply," said Brian Coleman-Smith, of Binns & Co. "In my view, the market has probably overdone it. We are still talking about a company that will deliver profits of over £25 million.

"I am sure things will recover when people realise things have been overdone," he added.

A leading North West stockbroker, who has followed Ultraframe's fortunes closely since its floatation five years ago, said the company had become a victim of its own earlier success.

"Ultraframe has been a growth company which has done extremely well for some time," he said. "The first profits warning in March was a setback for the company, which was not helped by its half-year figures, which saw a 13 per cent fall in profits.

"The second profits warning probably came as a shock to the City.

"The market has become used to seeing tremendous growth from Ultraframe. If the Stock Exchange was generally buoyant, the announcement would not have had the same effect. But in today's environment of difficult trading conditions, the warning had an increased impact."

The broker said Ultraframe's £88 million acquisition of American glazing company Four Seasons earlier this summer had failed to ingnite interest from investors.