Shares in RPS Group took a catastrophic 30 per cent hit this morning as it warned that third quarter profits would miss expectations.
The Oxford-based energy firm, which deals in oil and gas and renewables, said profit before tax and amortisation would fall 10 per cent year-on-year to £12.8m for the three months to the end of September, below board expectations.
For the nine months of the year so far pre-tax profit landed at £40.1m, £1.4m less than it had netted at this point in 2017, RPS added in the trading update.
RPS warned that “necessary investment” will weigh on profit this financial year, with group level costs of £2.5m that it expects will be ongoing, and a one-off £2m cost for a global brand relaunch.
“Taking into account the additional costs, the current view is that profit before tax and amortisation will be broadly similar to the full year of 2018,” RPS Group said.
Its conversion of profit into cash fell from 82 per cent in the year to September 2017 to 58 per cent for the nine months to September this year.
Meanwhile, revenue was also below board expectations, falling £2m to £139m for the third quarter. Revenue so far this year outstripped the first nine months of last year by £6m, however, at £428m.
Net debt stood at £86.2m for the quarter, down from £90.6m this time last year.