BLACKBURN-based Scapa Group has issued a profits warning following a slump in sales in its vital North American markets.

Group chief executive Tony Watson said the Board forecast pre-tax profits for the full year to be 15 per cent below current market expectations.

A leading analyst told the Evening Telegraph that the City had been expecting the company to deliver between £27-27.5 million for the year up to the end of March 2001. That figure had now been revised down to around £23 million, only marginally higher than the £22.5 million achieved last year.

The City reacted badly to the surprise and, within an hour, the share price had fallen by 18 per cent to 105p per share.

The Scapa Group sold off its manufacturing interests in East Lancashire in 1999 but retained its international headquarters at Preston New Road where around 20 people are employed.

The disposal programme followed the company's decision to concentrate on its specialist tapes business in which it was among the world's leading manufacturers.

In a statement to the Stock Exchange, Scapa said trading conditions had deteriorated since the Group's interim results in November 2000.

Looking further ahead, Mr Watson said the Board remained confident of long-term value for shareholders.