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KBC Advanced Tech (LSE:KBC) - disappointing statement but reaction looks over the top
Posted 13/05/09
Shares in KBC Advanced Technologies, the AIM quoted consultants to the oil refining, petrochemical and process industries, got thumped today after coming out with a disappointing, trading update.
The group confirmed how capital projects in the oil refining industry were being reconsidered or scaled back which has slowed down the award of anticipated contracts.
Revenue for the first four months of this year is still running ahead of 2008 but the group’s higher cost base and unfavourable changes in the Euro/Sterling exchange rate, has reduced profitability.
The shares ultimately fell 29% to 32p with approx 276,000 shares changing hands.
Today’s announcement was also somewhat surprising following two Directors purchase of an aggregate 35,000 shares back in April at prices up to 40p.
In response to the disappointing announcement the house broker cut their earnings forecasts by 21% for 2009 and 22% for 2010 to 5.9p for each year, leaving the shares now trading at 5.4x current year estimates. The projected dividend distribution remains at 1.5p resulting in a yield of c4.7% at the current price.
Today’s sell off certainly looks a bit harsh, especially considering the groups net cash of £5.6m at 31st December 2008, but with stocks down across the board it wasn’t a good day for poor announcements!
This entry was posted 1 year, 3 months ago and was filed under KBC Advanced Technologies.
