Long term play?19 Apr 2014 12:38
Limited knowledge of SAL but at first glance looks as though the current downward sp could provide a good long term play for the patient investor. Should turnaround given time, particularly as the economic climate for this type of business is improving
Cantor Fitzgerald has double-downgraded its recommendation on SpaceandPeople [LON:SAL] and moved straight to ‘sell’ from ‘buy’ after the company warned that pre-tax profit for 2014 will be around £1.5 million, a decline of 42 per cent year-on-year and well below the broker's £3 million estimate.
The company issued the profit warning as a result of poor performance across all of its core businesses.
On a more upbeat note, the broker said: “We recognise that the difficulties the group is experiencing are more likely to be because the group’s model is pioneering and therefore subject to delays as hurdles are overcome, rather than a structural and enduring problem.”
Nevertheless, analysts have slashed their target price to a mere 72 pence (previously 200 pence) after revising its forecasts down to reflect today’s updated guidance.
At 1:24pm: [LON:SAL] SpaceandPeople share price was down 45 pence at 87.5 pence.