'Significantly' escalating costs from suppliers, and weather-hit peat harvest forces producer of commercial horticulture and branded garden products to seek alternative suppliers.
William Sinclair has warned of price increases as its management team seeks to strengthen its trading position.

The move comes after the company announced its profits in the 15 month period to 30 September 2008 will be significantly lower than market expectations.

It is also warning shareholders it will cut the final dividend 'significantly' below last year's 2.5p per share.

In a trading statement released this morning, the leading producer of commercial horticulture and branded garden products said it has been hampered by 'significantly' escalating costs from a number of its suppliers, particularly in packaging and products such as fertilizers and oil.

"In addition the peat harvest in late June and the first half of July was very poor due to the adverse weather conditions at that time," the company added in the statement.

The consequences are reduced earnings and low stocks of peat for the 2009 selling season.

"The company will need to purchase in more expensive alternative supplies to meet its customers' needs," it added.

Remaining bullish despite the announcement, the board said it "continues to believe that market conditions are adversely affecting all suppliers in the industry and the company continues to be the best placed supplier for the year ahead."