Johns Lyng shares shed 25% on HY result, guidance downgrades
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The news: Shares in Johns Lyng tanked in early trading after the building services provider reported a 33% fall in first-half net profit and trimmed its full-year guidance, partly due to a lower number of insurance claims during the period.
The numbers: Johns Lyng shares were down 25.5% to $2.83 at 11am AEDT, making it the worst performing company across the ASX 200 index.
First-half net profit after tax fell from to $20.8 million from $31.1 million in the prior corresponding period. Sales revenue of $573 million was down 6.1% year on year, 7% behind consensus estimates of $615 million.
The company declared an interim dividend of 2.5 cents per share, down from average forecasts of 4.4 cents.
Johns Lyng lowered its full-year EBITDA guidance to $126.5 million, down 4.5% from its previous guidance of $132.5 million. It also cut its FY25 revenue guidance by 5%, from $1.23 billion to $1.17 billion.
The context: The company said it experienced a "challenging operating environment" during the six months to December, with benign weather conditions across Australia resulting in a reduced volume of insurance claims.
Meanwhile, work ramp-up in the Northern Rivers region of New South Wales progressed more slowly than expected, while project commencement delays in the US also impacted performance.
Citi analysts said that benign weather conditions in NSW and project delays in the US could remain as headwinds for the group despite guidance implying sequential improvement in financial contribution and margin.
What they said: "While we have been expecting a soft 1H result, it was well below our expectations," Citi's analysts said.
"... There is no shortage of challenges that [Johns Lyng] is navigating through and we expect these to persist for now."
The sources: ASX announcement, Citi research
