Shares in Universal Salvage, the wrecked car specialist, dived by 14% last week after the company issued a profit warning.

The group blamed a "sharp deterioration" in salvage auction prices with lower volumes and profits at the auctions where it sells the damaged cars it buys from insurers. It had expected a winter upswing that had not materialised.

The company said in a statement that it expected second half results "to show only a small improvement on the pre-exceptional loss incurred in the first half".

It had reported a £1.9m pre-tax loss for the 26 weeks to 1 November 2003 on turnover that had fallen to £22.8m from £31.6m in the same period the year before.