Shares in telecommunications company BSA slumped 29% today after it advised a downgrade of about 20% on its market guidance for the full year to end of June 2008.
The company now expects revenue to be $240 to $245 million, about 4.5% down on previous market guidance of $255 million.
In a statement to the stock exchange, BSA said this was due to factors such as delays in major projects currently being undertaken by the Triple M Group due to the inclement weather experienced in both Sydney and Brisbane.
In addition, the delay in commencing the Orange Hospital Public Private Partnership and lower revenues under the SILCAR (Telstra, installation and maintenance contract made impacts).
A number of abnormal items will impact the EBITDA and NPAT results, the company said.
These include the costs associated with the Hills Industries unsuccessful merger and obsolete inventory write offs not previously identified in prior years.
“The abnormal expenditure items are disappointing for what otherwise has been a very strong year, had they not materialised we were on target to achieve our previous projections released to the market,” managing director Mark Foley said.
“Whilst we are advising the market today of a result that is lower than expected, future prospects remain strong with all of our major contracts in our Contracting Solutions space locked in.”
He said the level of customer inquiry in building services (Triple M) division is the strongest it has been in the past 5 years, this is being driven out of the Private sector, combined with PPP and Health opportunities.
He concluded by saying, “on current projections it is anticipated that BSA will pay a final dividend of 1.5 cents per share fully franked which will result in a total of 5 cents per share being returned to shareholders for the full year.
Based on the current BSA share price this will represent a fully franked dividend yield in excess of 10%.
The company has a market capitalisation of about $85 million.
Shares in BSA ended 29% or 13 cents down at 32 cents.
