Stock in Sanctuary Group continued in its downward trend after the British independent firm today (Sept. 21) reported its third profit warning since June. The company has also openly blamed its expans

Stock in Sanctuary Group continued in its downward trend after the British independent firm today (Sept. 21) reported its third profit warning since June. The company has also openly blamed its expansion plans for its recent financial predicament.

In a statement issued to the London Stock Exchange, the firm said that full-year losses would be below the lowest end of market expectations.

The group said it was "likely" to generate a loss at the level of earnings before interest, tax, depreciation and amortisation and before exceptional items including restructuring costs and provisions.

Moreover, group CEO Andy Taylor openly admitted that the company's bullish expansion strategy had damaged its outlook, in the short-term at least.

"I am well aware that Sanctuary has disappointed the market significantly this year and, with hindsight, it is clear we grew too fast," Taylor said in the statement.

In morning trading, the London-based company's shareprice was down 16.5% to 8.35p. Sanctuary's 52-week peak shareprice is 45p.

Sanctuary said it was on target to achieve £7 million ($12.6 million) to £8 million ($14.4 million) of annual cost saving to be implemented by the year-end and intended to make additional cost savings.

Sources at Sanctuary are confident that the company is close to turning the corner and return to financial health. "We feel like we are getting a fresh start. Next year definitely won't be so bad," says the source.

The company also asserts that it continues to have the support of its bankers, a factor which bodes well, analysts say. "The fact that the banks aren't foreclosing on them and that they will continue to have the banks' support is very positive," says Patrick Yau, analyst with Bridgewell Securities. "The downside is that this year will be dreadful (financially). They are going to be hit by declining revenues and declining margins. But they feel that they will bounce back quickly."

Since first alerting the market on June 28 to Sanctuary's "regrettable and unacceptable" first-half financial results, the company's executive board has undertaken a review of its operations. Most recently, the company's loss-making books publishing division was sold recently to Music Sales Group.

Talks on a buyout of Sanctuary subsequently collapsed in August, when Warner Music pulled out. In today's update, Sanctuary said it continued to be in discussions over the sale of a number of unidentified non-core businesses.

"I am totally focused on repairing the short-term damage to what is fundamentally a robust business," says Taylor. "The board and I are determined to steer a company that has an extremely strong roster of artists back to a profitable trading position and back to sustainable long term growth."

A Sanctuary spokesperson declined further comment.