On-the-market Birmingham-based medical equipment group Ferraris has warned it expects to perform below budget and market expectations, particularly in the first half of the financial year.

And it is set to break itself up rather than look for a single buyer.

However, recent sales and development initiatives were promising and trading prospects for the full year were excellent, the company said.

The effect of operational gearing was anticipated to give a greater weighting to second-half profits than in previous years.

The company said it had completed its review of strategic opportunities and had concluded that greater value could be obtained by selling its businesses separately rather than finding a buyer for the business as a whole.

Ferraris is currently in negotiations with several interested parties and will report on progress at the earliest possible opportunity. Its Cardiac division has increased its sales force and accelerated its research and development programme in order to improve market share and broaden its product range.

While the company said it remained confident of the benefits of these initiatives, they were materialising more slowly than anticipated. The Respiratory division was showing continued progress with its device sales but clinical trials were performing below expectations.

In Vitro Diagnostic Controls continued to trade strongly and move forward strategically with the key diabetes market showing growth.