Broker delivers another setback to Business Post
Business Post was the biggest faller among second-liners yesterday, dropping 10percent and adding to the misery of shareholders who have seen the value of their investment almost halve this year.
Brokers took a knife to expectations after Business Post said profits would come in “substantially lower” than last year. It blamed weakening economic conditions which meant its customers were cutting back, leading to a sharp deterioration in its core businessto-business parcel service.
Daily volumes of its Express delivery side during August dropped below those of the previous year. The company had also had to make a provision of Pounds 3.2 million to cover outstanding payments from franchisees relating to previous years. The group has almost 60 depots, of which 34 are run by franchisees.
Broker Altium was one of those behind yesterday’s fall after slashing its target from 450p to 400p and telling clients it was becoming increasingly concerned that trading and operational issues are likely to get worse.
Altium says the shares are trading on a prospective price-earnings ratio of 15 for 2007 and the board has still to make clear its ongoing dividend policy. It is urging clients to continue reducing their holdings.
