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.
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
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.
-
Should you invest in UK equities?
The FTSE 100 hit a record high this week, but UK equities remain unloved and undervalued compared to their global and US peers. Should you snap them up at a discount?
By Katie Williams Published
-
State pension errors: DWP urged to check for mistakes among divorced people
Former pensions minister Steve Webb says there are a high number of divorced women on low state pensions. Now MPs want the DWP to check if there were any errors in “potentially underpaying men and women who are divorced”.
By Ruth Emery Published