Shares in McAleese Group (MCS), owner of the troubled Cootes Transport business, were hammered yesterday after it issued its second profit warning in two months.
The shares fell more than 15% to 43.5c yesterday in reaction to the news from McAleese that trading in the March quarter has been more difficult than expected because of safety breaches (especially in NSW) and weak demand for its heavy haulage services.
That means McAleese shares have lost more than $1 of the $1.47 they were issued at in the float on the ASX last November, after the tanker crash at Mona Vale in Sydney’s northern beaches.
McAleese has been struggling to regain credibility with investors following that fatal truck accident in Sydney last October and the the subsequent discovery of numerous safety breaches in its Cootes tanker unit.
Yesterday the company told the ASX that sales revenue for the March quarter would be $9 million less than forecast and earnings before interest taxation depreciation and amortisation would be down $7 million.
McAleese is run and controlled (with a 30% stake) by former Asciano (and Toll) executive Mark Rowsthorn.
In yesterday’s statement, the company blamed the falls in revenues and earnings on the increased investment in Cootes fleet to improve safety and a fall in fleet availability after its trucks were hauled off the roads by state regulators for inspections.
But it also said the company had seen costs rise in its resources division, which hauls commodities from mines to ports, and “faster than expected” falls in demand for its heavy haulage services from liquified natural gas projects in Queensland.
Mr Rowsthorn said the company was improving management of its resources division to better assess swings in demand, selling non-core assets including exiting “unprofitable oil and gas segments”, cutting costs “to align with lower underlying demand in specialised transport and lifting” and improving customer service.
The company said it will update the market on these actions in May when it will also provide an updated financial outlook for fiscal 2014.
But at least McAleese could work out the damage to its business from its problems.
It’s got to be worse at Australian Pharmaceutical Industries (API) with the company’s shares being suspended from trading yesterday while the drugs distributor and pharmacies operator continues to crunch the numbers on the carrying value of its assets.
‘‘The suspension is necessary as API is continuing to make an assessment of the carrying value of its assets, as part of the process of finalising its half year results scheduled to be released on 30 April, 2014,’’ the company said in a statement on Wednesday.
It had been expected to detail the value of its assets ahead of trading yesterday. That was promised in a statement on Monday from the company when asking for a halt to trading in its shares, which closed at 56.5c last Friday.
Now the company, which owns the Priceline, Soul Pattinson and Pharmacist Advice brands, expects to make an announcement about its asset values shortly after the close of trading on the share market today.
The problem is related to loans and other payments to pharmacies which are now unable to repay them. The same problem with loans hit rival Sigma in its 2013-14 financial year.
