March 22, 2012 / 3:03 PM / in 5 years

Colabor Group shares plunge on weak results, dividend cut

March 22 (Reuters) - Shares of Colabor Group Inc, which supplies frozen foods and beauty and care products, fell 35 percent to their lowest in more than three years after the company reported a fall in quarterly profit and slashed its dividend.

The company, facing tough competition, said on Wednesday it does not expect the business environment to improve this year.

Colabor plans to add new products and grow through acquisitions, but these measures are not likely to improve earnings before the second half of the year, analyst Leon Aghazarian of National Bank Financial said.

The analyst, who kept his "underperform" rating on the stock, cut his price target to C$7.50 from C$10.50.

The company also warehouses food products and dry goods, and operates in Quebec, Atlantic Canada and Ontario. Its partners include Heinz, Hershey's, Cadbury and Canada Bread.

Colabor shares were down 22 percent at C$8.18 on Thursday morning on the Toronto Stock Exchange. The stock, which was the top percentage loser on the exchange, fell as much as C$6.85 earlier. (Reporting by Shounak Dasgupta in Bangalore; Editing by Sreejiraj Eluvangal)

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