Johns Lyng Group Shares Plummet After Earnings Downgrade

Highlights:

• Johns Lyng Group (ASX: JLG) slashes FY25 earnings forecast to $126.5 million, down 4.5% from previous guidance.
• Revenue projections cut by 5% to $1.2 billion amid project delays in NSW and the U.S.
• Net profit for the first half drops to $20.8 million, down from $31.1 million a year ago.

Revenue and Profit Forecasts Cut Amid Project Delays

Johns Lyng Group (ASX: JLG) saw its shares plunge over 26% on Tuesday following a downward revision of its FY25 earnings guidance. The insurance and construction services provider cited delays in its New South Wales and U.S. projects as key factors behind the revision.

The company now expects full-year earnings to reach $126.5 million, a 4.5% drop from its prior guidance of $132.5 million. Additionally, revenue projections have been cut by 5% to $1.2 billion. This follows a sharp decline in net profit, which fell to $20.8 million in the first half of FY24, compared to $31.1 million a year earlier.

Cost-Cutting Measures and Project Delays

Johns Lyng Group responded to the downgrade by implementing a cost-reduction program aimed at improving financial stability amid evolving market conditions.

The company attributed its weaker outlook to benign weather conditions, which resulted in lower insurance claims and fewer catastrophe (CAT)-related projects. Furthermore, slower-than-expected progress in NSW’s Northern Rivers region and delays in project commencements in the U.S. also negatively impacted performance.

Despite the setbacks, Johns Lyng remains focused on recalibrating its overhead costs and maintaining financial discipline to navigate current market challenges.

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