SHARES in the Belfast engineering group Mackie International are set to fall sharply after the company warned that difficulties in its textile machinery business "will result in a reduction in profit expectations in the current year

The shock announcement from Mackie yesterday morning came after the company's shares fell 31p to 187 1/2p sterling the previous day. Mackie made its statement after the London Stock Exchange sought an explanation for the fall.

Mackie shares did not trade in London yesterday, but they were marked down to a 155p-160p bid offer spread, an all time low for the shares and the first time they have fallen below the 180p flotation price of two years ago.

The profits warning comes just, four months after the company said profits in the current year would be ahead of last year's £3.3 million sterling "but not by a lot". At that stage, analysts revised their 1996 forecasts down towards £3.3 million. Chairman Mr Pat Dougan told The Irish Times the group was looking to break even in the second half, indicating full year profits would be just above £1 million.

Commenting on the collapse in the Mackie share price since last March, Mr Dougan said: "No way is it justified; we think it's very unfair", adding that Mackie aims to have profits of around £3 million on sales of £30 million next year. Mr Dougan said that Mackie's market capitalisation compares with net assets of £22 million and commented: "This makes us hostage to a predator."

In his statement, Mr Dougan said the trading climate in the textile machinery business remained difficult and defended the group's decision to reduce its dependence on this sector. Mackie's other businesses, including its recent electrical panels acquisition, were all doing well.

"The textile division remains the difficult area. It is the view of the linen producers that the recent cyclical decline in their industry has been the worst experienced in recent years. Despite business of approximately £25 million currently under negotiation, expectations for this division in 1997 have been reduced to abut £12 million," said Mr Dougan. He added that total turnover in 1997 will be more than £30 million.

The chairman emphasised, however, that Mackie had a strong balance sheet and that the board was confident of making a strong recovery from this "temporary setback".

After a glowing first year and a half on the market, when its shares rose as high as 380p sterling, Mackie has had a dismal last six months, with its shares plunging to Wednesday's close of 187 1/2p and likely to fall to under 160p when they next trade.

Last March, when the shares reached 380p, Mr Dougan and his family interests sold half of their 26 per cent stake for £4.75 million. That move was welcomed at the time as it expanded Mackie's Irish and British institutional shareholder base. Those shareholders, as well as the underwriters who had to take up almost two thirds of a £6.7 million rights issue in July at 275p per share, are now sitting on sizeable paper losses.