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The market punished Aveng's share price as its profits dip

by , 10 September 2013

Earlier today, construction company Aveng released its full year results. And they showed that the company's profit margin was suffering. So far today, Aveng's shares have fallen 4.62%. Let's take a more detailed look at what the results showed…

Aveng, the top construction company in SA, posted “a drop in full year profit,” reports IOL. The company says that “weakness in its domestic construction business” affected profits.

Headline earnings per shares fell 3% for the year to June, reports Fin24. This year, it came in at 124.6c.

But the company has also warned that strikes in the sector “could dent profit again this year,” adds IOL.

Like other construction firms in SA, Aveng has struggled to grow profits, reports MoneyWeb. This is after the furore of construction “for the 2013 soccer World Cup”. Poor demand “from the public sector” has also not helped.

The builder says that its domestic construction business operated at a loss to the year to June, reports IOL. This follows labour unrest and “losses on some major contracts”.

Along with several big construction firms, Aveng had to pay for its part in collusion

Aveng also had to deal with the large fine it received from the Competition Commission, says BDLive. The firm received a fine for R307 million for its part in collusion.

Last month the company warned about its profits coming in lower, notes IOL. This sent the share plummeting more than 11%, its “biggest one day fall in about five years”.

And despite this warning, the share is feeling the wrath of the market today. At time of writing, the share price was down 4.62%.

Aveng also didn’t declare a dividend this year.

So not a fantastic set of results, but on par with last year.

The market punished Aveng's share price as its profits dip
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