Volatile and competitive markets are blamed in the UK, while US division also underperforms.

Ultraframe has issued a profit warning after it reported that its sales in the UK were down 18% on the previous year.

The conservatory manufacturer blamed volatile and competitive markets for the fall in sales and it predicted that pre-tax profit for the group would fall to £12m in 2004.

The firm said sales in July were 8% lower than forecast in the UK, and said that there was pressure on its profit margins.

Ultraframe said that profit was likely to be further squeezed in 2005, although it predicted that the current rate of decline in profit and turnover would slow next year.

The company was hopeful that an expanded range of products would enable it to build market share in the budget sector in 2005.

In North America, Ultraframe said that gross margins were lower than expected because of high production costs and overruns in overhead costs such as marketing. As a result the company says that dollar profit for the year would be “significantly” below expectations.

Ultraframe expected dollar sales to grow more strongly in 2005. It said that with an increased focus on margins and overhead expenditure profit the US division would make a modest recovery next year, which would help offset the poor performance in the UK.