Shares in AIM-listed maritime waste treatment provider Nature Group tumbled on Monday following publication of a trading update by the company. Those were the first since naming a new Chairman.
The company stated that the results for the year would be materially below market expectations as a result of the combined effect of delays in completion of a number of projects and orders, along with the increased costs associated with preparing for the expansion of the business.
The second half of 2012 would be adversely affected by a lower than expected level of revenue and decreasing margins in the company's oil and gas division, the company explained in its update.
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"The deployment and sales of our compact treatment units (CTU) are taking longer than previously anticipated and consequently revenue from these units - that management had expected to occur in the year ending 2012 - are now expected to complete in 2013," the update stated.
"We had anticipated when building the last two CTU's that they would have been deployed sooner, but it is now apparent that they won't contribute to Nature's 2012 results," the firm explained.
At the right place even if not ....
Nevertheless, and as the pipeline of projects for its CTU's grows, the company says it is still confident that the operational shift within the oil and gas industry, for treating waste offshore instead of onshore, is happening."
In spite of challenges, the company reported promising developments: "Over the last two years we are extremely pleased by the number of opportunities which have been generated in both existing and new market locations and are actively progressing several of these and we expect to make further announcements in the near future".
Increased traffic through Rotterdam, company saysThe company stated that its Engineering division had signed a contract with the UK Ministry of Defence for the construction of a waste processing facility in an overseas territory with a contract value in excess of £2m.
As well, the Maritime division reported that it is benefiting from an improvement in global maritime traffic through Rotterdam.
"The Board is confident of the fundamental long-term prospects of the group. Our technology and services are gaining increasing recognition and we are committed to a controlled expansion. Our balance sheet is robust and we still have approximately £1m of net cash, despite our many recent capital expenditures. The company remains committed to its previously announced dividend payout policy," the statement added.
Lastly, the company remained committed to its previously announced dividend payout policy.
As of 11:02 shares of Nature Group are off by 27.7% to 21.5p.
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