Shares in bedding and furniture group Silentnight took a pasting after the firm warned first-half profits would fall substantially below last year's levels.

Chief executive Bill Simpson said the furniture division had been hit by continued operational problems and a sharp fall in orders.

He said: "The market was down, well down, in April, affected by the early Easter, tax rises, all sorts of things. April was awful."

While the core UK beds division was faring well, Mr Simpson said interim profits were only likely to come in at about £1.75 million.

The group's house broker Collins Stewart immediately cut its forecast for full-year profits, from £15 million to £8 million and shares in the group dived nine per cent to 173p.

Silentnight has been dogged by problems in turning around the performance of Cornwell Parker and Ducal, two furniture firms bought in late 2000.

Mr Simpson said operational improvements at Ducal had slipped and production was being consolidated into fewer units to increase efficiency.

The market needed to help and last month had seen only a modest upturn in orders for upholstery and cabinet equipment.

Silentnight made half-year profits of £5.4 million a year ago and Mr Simpson said he was confident of reaching Collins Stewart's revised full-year target.

The group was still some way from being forced to close or sell off its furniture arm and focus on beds.

Mr Simpson said: "I would never rule it out but that's not what we bought the two businesses for."

In April, Silentnight said sales in the beds business rose seven per cent to £162 million in the year to February 3 with operating profits hitting £15.5 million.

Operating losses in the furniture arm were £3.2 million in the same period, compared with £495,000 in the previous year.