There have been some hefty falls in the mid-cap index following some badly received updates.
Cyber security and risk mitigation company NCC has plunged 34% to 227.7p after it reported 21% growth in the first four months of the year but said three large contracts had been cancelled, one in the Netherlands had been deferred and it faced difficulties with the renewal of some managed services contracts.
It said it was too early to quantify the impact on the current year, but growth would now be more biases towards the second half than it had expected. Canaccord Genuity said:
We expect these issues will have a significant impact on first half margins but the company believes they can recover in the second half. We believe this will be challenging given the expectation of group margins improving this year.
We expect consensus estimates for the full year to be cut by around 10% if only to be conservative and believe the downside could ultimately be greater if recovery is not achieved. A decrease in earnings estimates combined with a de-rating could have a material impact on the stock.
Meanwhile Keller is down 26% at 652.5p after the engineering group said its full year results would be 15% below expectations, mainly due to difficult trading in Asia. It will also take a £10m hit in the second half for further restructuring. Numis said:
Whilst management have made some positive noises in regards to outlook, this is the second profit warning in three months and therefore investors may be sceptical of management guidance. As a result, we retain our hold recommendation on a reduced target price of 720p.
And Senior has slid 16% to 170.5p as it warned annual profits would be below expectations due to lower demand for parts used in both the oil and gas markets as well as production of heavy trucks. Liberum said:
Weakness was across the division in Flexonics, with particular weakness in North American Heavy Trucks. We have been cautious on this for some time, while the company cites Flexonics as the main cause of the downgrade, we are also concerned about ramp-up risks in the civil aero cycle, with the company acknowledging that this was slower than anticipated in the third quarter.
The three companies are currently the three biggest fallers in the FTSE 250 following their various warnings.
