StockMarketWire.com - Fire safety product distributor FireAngel said it expected to suffer a further exceptional charge from increased product replacement costs.

The company said it would take a charge of around £3.2m in the year, relating to stock provisions and the impairment of intangible development costs.

The change was the result of a 'thorough review of product lines and future development plans', FireAngel said.

The company had previously flagged exceptional charges in a legacy battery warranty provision for increased product replacement costs, and for restructuring and fundraising costs of £1.4m and £0.7m, respectively.

'Continuing ongoing monitoring of warranty returns data has identified that the number of units expected to be impacted by the third-party supplied battery impedance issue, first identified in April 2016, could be approximately 30% higher than originally anticipated, impacting approximately 300,000 units,' the company said.

But the company said it did not anticipate that there would be any further increase in the number of units impacted as it related only to units produced at one of the company's previous manufacturers in China up to the end of March 2018.

FireAngel detailed plans to halve its number of stock keeping units (SKUs), with the majority of the reduction expected to be achieved before the end of this year. After the reluanch of products, the reduction in SKUs would be around 30%, the company said.

Looking ahead, the company said its results for the year ending 31 December 2020 was expected to be in line with market expectations.

At 8:03am: [LON:FA.] Fireangel Safety Technology Group Plc Ord 2p share price was -0.25p at 15p.

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