B&B shocks the market with a profit downgrade, only a few months after affirming previous guidance. B&B are unable to provide a precise estimate of the likely write down ("between 25 and 40% below (the previous guidance)" - and they're still in discussions with their auditors as to the extent of the write down..
One fund manager said it was "just terrible" that Babcock was producing such a wide range of possible numbers so close to the August 24 date when it had to report for the six months to June 30.
"Why now? Where have they been that they give us a range of between 25 and 40 per cent below the previous corresponding period?" he said.
"It's a month and 11 days past the book's close date for the half year number. It's pathetic."
Obvious questions will be asked about compliance with disclosure obligations.
Any impact on restrictions based around debt agreements?
Deutsche Bank said: "While non-cash impairment provisions are disappointing, we note they are excluded from calculations pertaining to the group's three times interest coverage covenant, suggesting (yesterday's) announcement is unlikely to compromise BNB's position with its bankers."
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