Solco forecasts 23.6% profit drop

Solar product wholesaler Solco Limited (ASX:SOO) is forecasting a 23.6% decrease in FY12 revenue, due to the flow-on effects of legislative changes.

The company has advised it expects revenue of $41 million for the year, compared to $53.7 million in FY11, stating that the outlook assumes no further deterioration in the market.

Solco blamed the anticipated declines on significantly reduced sales in the first two months of the year, due to the impact of the legislative changes on the solar wholesale market.

But sales began to pick back up in September, the company added, and the recovery is forecast to continue for the rest of the year.

Despite the market hiccup, Solco executive chairman David Richardson said he remains positive about the outlook for the renewable energy industry.

He added that Solco is in a position to be able to capitalise on the market downturn, and use it to lay the foundation for when trading conditions improve.

Solco earned a record $3.6 million in pre-tax profit in FY11, while revenue grew to $53.7 million from $34.5 million a year earlier.

SOO shares stayed flat on Thursday at $0.095.