AEA Technology's share price tumbled from 1.98p yesterday to just 0.40p on Wednesday morning after a profit warning and the departure of its chief executive officer (CEO) spooked investors.
The energy and environmental company admitted that adjusted operating profits for the year ended 31 March 2012 will be "significantly lower" than expectations. Despite an in-line first half performance, the second half has been hit by a "reduced forecast outturn" in its Washington-based business PPC.
"Whilst PPC's order intake and the order book remain strong the short term revenue profile has been adversely affected by the late placement of some orders and some expected orders not being won," the firm said.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
As such, AEA is said to be in discussions with its bank regarding its facility and related covenants. CEO Andrew McCree has decided to step down with immediate effect as a result.
Peel Hunt analyst Andrew Shepherd-Barron said, "An earnings miss at one of AEA's two US consultancies and the unexpected departure of CEO Andrew McCree bring significant uncertainty." The broker has cut its target price from 3p to 1p this morning.
By 10:36 in London, shares were down 79.75% to 0.4p.
Survive a financial nuclear winter
The “cockroach portfolio” is as hardy as the indestructible insect it is named after, says Dominic Frisby
By Dominic Frisby Published
NatWest-owned Ulster bank boosts easy access savings rate to 5.2%
Rates on easy access savings accounts have hit over 5%, with Ulster Bank now giving savers the chance to earn 5.2% on their cash savings. We have all the details.
By Marc Shoffman Published