Servcorp (SRV) shares were pounded yesterday after it downgraded its pre-tax profit guidance from ‘at least $56 million’ for fiscal 2017 to circa $47 million. The shares closed more than 19% lower at $6.05 as it joined the likes of Aconex in copping a pasting after a downgrade.
Aconex shares ended the day down more than 45%.
Servcorp shares fell as low as $5.51 during trading, the lowest since early 2015.
Servcorp blamed the downgrade to unfavourable trading conditions in the second quarter, particularly in the US and southeast Asia regions.
Servcorp is one of the world’s leading providers of executive and serviced offices, virtual offices and IT and business infrastructure solutions, operating 150 floors in 53 cities across 23 countries.
The company said that part of the underperformance from the US business was due to restructuring costs, and in response to more challenging conditions in that region it has relocated chief operating officer Marcus Moufarrige to New York City.
Servcorp said cash balances remain at $115 million, and the group had increased the previously forecast fiscal 2017 interim and final dividends of 11 cents each per share to 13 cents each per share in an effort to pacify shareholders upset by the downgrade and share selloff.
