Shares in Johns Lyng Group (ASX: JLG) fell 24% to a four-year low of $2.90 after the company delivered weaker-than-expected interim results and revised its full-year guidance downward.
Citi analyst William Park noted that while a softer first-half result had been anticipated, the actual performance was significantly below expectations.
The company has now lowered its outlook for the 2025 financial year (FY25), trimming forecasts for business-as-usual (BAU) revenue by 6% and EBITDA by 13%.
Despite guidance suggesting an improvement in financial performance and margins over the coming periods, Park highlighted ongoing headwinds, including subdued weather conditions in New South Wales and delays in project commencements in the United States.
He also expressed concern over the lingering risk that work volumes may not see a substantial increase, as more policyholders opt for higher excess and industry feedback suggests many claims related to adverse weather have been settled in cash rather than generating work for the company.
Additionally, Park noted that sluggish growth in the US was likely to remain a challenge for the foreseeable future.
With multiple obstacles still in play, he expects Johns Lyng Group to continue navigating a difficult operating environment.