The share price of digital and communication services group Hasgrove collapsed on Friday, after the firm revealed that full-year profits would be half of what is currently expected.
The group now expects a pre-exceptional operating profit of £1.5m in the year ending 31 December, well below current market expectations of £3.3m. This figure would fall to £0.8m after excluding contributions from Interel, its European corporate affairs consultancy business which it offloaded in July.
Hasgrove said that The Chase and Landmarks design businesses "have found trading difficult" while overruns on two business solutions projects have also hit profits. Delays in client-spending decisions have also been seen.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
"We are clearly very disappointed to be reporting a profits warning and will continue to take the required action. We continue to control costs where appropriate and are focused on servicing our clients," said chief executive Paul Sanders.
By 13:01, shares had fallen 30.77% to 31.5p, down from yesterday's closing price of 45.5p.
Peel Hunt downgraded the stock from buy to hold and cut its target price by two-thirds to 25p (from 75p).
BC
-
FTSE 100 hits record highs – why is it rising and will we see more gains?Advice UK equities have been described as unloved for a long time but as the FTSE 100 hits new highs, we explain if now is the time to buy British.
-
How to invest in copperIt may be time to invest in copper as the red metal appears poised for a big jump. Dominic Frisby looks at what should investors should buy
