Stockford share price collapses
Financial planners who traded their businesses for shares in consolidator Stockford may have lost up to half the value of their business in a day after Stockford’s share price collapsed yesterday.
Shares in the accounting and financial services consolidator Stockford plunged 42 per cent to $0.84 yesterday, knocking $132 million off its market capitalisation after it circulated its second profit downgrade in two months. The closing price was a whopping 60 per cent lower than its peak of $2.15 in January. However, it is only 16 per cent below its issue price before listing last November.
Chief executive Jim Phillipson blamed the expected earnings shortfall on the amount of cash the group had had to plough into its infrastructure to provide it with a growth platform.
The group's plans to centralise its infrastructure, information technology and management was also taking longer than expected and the cost benefits of those moves had not yet begun to flow through.
"Our planning now is to have rationalised infrastructure in place within a year which means absorbing duplicated costs of disparate systems for longer than originally planned," Phillipson says.
Phillipson says the group will consider selling non-core operations so it could focus on its main accounting, financial services and IT services. He says the group's main priority is to invest in integration and infrastructure systems.
"Over our projected two-year rollout, this investment will reduce as systems and integration goals are achieved," he says.
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