ELECTRONICS firm Stadium Group saw its share price plunge yesterday after it warned that its operating profits will be below expectations.

The Hartlepool-based company said that a fall in business at its electronics division and some delays in customer activity in longer-term service contracts for its otherwise strong power supply arm.

But despite a fall in its share price to 62p the firm said that it was expecting to see a rise in revenues and earnings next year and still had a £9m war chest and was looking for acquisitions.

Chief executive Stephen Phipson said that it had invested in five extra sales staff and an operations manager this year which had increased expenses but were likely to boost the business next year.

“We are reducing costs through improved efficiency, though not through job losses, and will be seeing an increased number of contracts next year. We are seeing evidence of an increase in momentum. We are expecting a good 2012.”

Stadium also said that its regular re-evaluation of its pension liabilities meant that bottomline profits would rise higher than expected this year.

The company said: “The opportunities for organic growth in reported earnings through both new business wins, and operational leverage, are considerable, and there are signs of early momentum being generated from these initiatives.

“These benefits are expected to accelerate in the next 12 months and further details of progress in these areas will be provided in due course.”

Broker Brewin Dolphin said that reported profits were expected to be around £1m higher than the forecast £3m due to a one-off reduction in pension liabilities.

But it said that underlying profits are likely to be £2.5m instead of the forecast £3m because of the delays in call-offs from some companies but that this was likely to rise in the New Year.

It increased its 2012 forecast bottom line profit from £3.3m to £3.5m for 2012.