However, the shares bounced back from a low of 170p to close at 230p, 63p down on the day. The company has suffered similar wild gyrations before because of persistent fears about its debts of nearly pounds 1bn and its rapid expansion. It tried to reassure investors by promising a final dividend of at least 14.4p, which would give an increased total of 19.3p per share.
Tiphook said recession in many of its markets had depressed second-half profits below the pounds 35.2m it made in the first half. Analysts believe the group will make pre-tax profits of pounds 55m-pounds 58m in the financial year that ends today, 20 per cent below earlier estimates. Last year it made pounds 86.4m.
The company has agreed to sell 9,532 of its older trailers for about pounds 130m to two trailer manufacturers. As part of the deal, Tiphook plans to spend pounds 387m over the next five years on 11,000 newer and better trailers. It is paying an initial deposit of pounds 109m, which means it will receive little cash from the disposal. None the less, the deal creates a pounds 16m profit above the value of the trailers in Tiphook's accounts.
Analysts were critical of Tiphook's warning and its timing. One said: 'This is not a company with a high level of credibility around town. You don't have to wait until the fourth week of the last month of your year before it's obvious you're not making everybody's profit forecasts.'
Another said: 'The management has always been more upbeat than reality should allow. A downgrade of this extent would not knock the stuffing out of the share price of a less fragile company.'.
Bottom Line, page 27Reuse content