Shares in AJ Lucas Group fell more than 10 per cent after the company told shareholders to brace themselves for disappointing half-year results.
Despite saying it expected a second-half turnaround, shares in the company fell from its previous close of $3.24 to just $2.90 after coming out of a trading halt. The shares later recovered but were still down 8 cents, or 2.5 per cent, to $3.16 at the close.
Earlier the company said earnings before interest, tax, depreciation and amortisation (EBITDA) for the six months to December 31 are expected to show an $18 million loss.
"As foreshadowed in the 2009 Annual Report and November’s annual general meeting, the Group has experienced a disappointing first half year," AJ Lucas said in a statement today.
"The legacy of management missteps from the previous financial year, delays in project timing and general business uncertainty have all affected the group’s financial performance," it told the stock exchange.
The company said its EBITDA included non-recurring costs of $10.1 million, and no interim dividend for the half-year was anticipated.
Drilling revenues were strong during the first half of the financial year, but the general market uncertainty in 2009 led to irregular work, it said.
"Infrastructure works on the various CSG (coal seam gas) and LNG (liquefied natural gas) projects, the division’s principal domain, have been slow to start, affecting the financial results," it said.
But AJ Lucas said the second half should see much stronger results, with EBITDA of more than $30 million and its "growing pains" over.
"Our future prospects are very encouraging," AJ Lucas the company said.
"The drilling division now has a full order book for calendar 2010 and, barring unforeseen events, will deliver a substantially improved operating result in the second half," AJ Lucas said.
Its construction and infrastructure divisions benefited from $20 million in work to government schools, with another $20 million of such work to come, it said.
AAP
