Capital Drilling dives on profit warning

Shares in Capital Drilling fell heavily after quarterly results came in below market expectations and the company said this would impact full year results.

Shares in Capital Drilling fell heavily after quarterly results came in below market expectations and the company said this would impact full year results.

The developing markets drilling firm blamed budget constraints being faced by many of its clients, 70% of which are large blue chip mining "majors".

This hit both revenues and margins in the three months to the end of September.

The company was also impacted by temporary industrial action in Egypt, as well as a weaker than expected performance in Tanzania, two key countries in which Capital Drilling generates around 40% of its total revenues.

Capital said as a result of the impacts during the third quarter, full year revenues were expected to come in just below consensus forecasts for 2012.

It also warned of lower than consensus full year margin performance and a consequent impact on profit.

Chief Executive Geoff Fardell said whilst net margins were lower in the last quarter than consensus forecasts, the company had initiated cost reduction and efficiency programs to improve margins.

"We continue to monitor market conditions and at the same time we are seeing tender opportunities, and are confident that these new opportunities and the delivery of cost efficiencies, which began in the third quarter, will flow through in future periods," he said.

Shares were down 11.7% at 09:00 following the announcement.

Recommended

Share tips of the week - 12 August
Share tips

Share tips of the week - 12 August

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
12 Aug 2022
Britain’s ten most-hated shares – w/e 9 August
Stocks and shares

Britain’s ten most-hated shares – w/e 9 August

Rupert Hargreaves looks at Britain's ten most-hated shares, and what short-sellers are looking at now.
10 Aug 2022
Aviva: One for income investors to tuck away
Share tips

Aviva: One for income investors to tuck away

Insurance giant Aviva is one of the highest yielding stocks in the FTSE 100 – and it’s cheap, too, making it a tempting target for income investors. R…
10 Aug 2022
Director dealings w/e 5 August: what company insiders are buying and selling
Stocks and shares

Director dealings w/e 5 August: what company insiders are buying and selling

Directors’ share dealings can often give investors an insight into the sentiment of company insiders. Here are some of the biggest deals by company di…
9 Aug 2022

Most Popular

UK House Prices Set To Fall? It’s Not So Simple
House prices

UK House Prices Set To Fall? It’s Not So Simple

Figures suggest UK house prices are starting to slide, but we shouldn’t take these numbers at face value, explains Rupert Hargreaves.
11 Aug 2022
Are UK house prices finally heading for a crash?
House prices

Are UK house prices finally heading for a crash?

The latest house price figures show a fall of 0.1% in July. With interest rates rising, inflation hitting double figures and a recession on the cards,…
5 Aug 2022
Three solar stocks to invest in
Renewables

Three solar stocks to invest in

This week, professional investor Nicholas Mersch of the HANetfS&P Global Clean Energy Select HANzero UCITS ETF tells us three solar stocks to invest i…
12 Aug 2022