Shares in construction consultancy firm Driver Group plc (LON:DRV) fell more than 13% Wednesday morning after it was forced to up its debt provision, despite returning to profit in the second half.
Operational changes in Africa, Middle East and Asia (AMEA) have failed to improve performance in the region, with operating profits “well behind internal forecasts”, forcing the board to increase its provision against outstanding debts in the region by a further £520,000.
Net debt at the financial year end is expected to be in the region of £9mln.
It now expects to report a "modest" operating loss before exceptional items for the full year.
The poor AMEA performance overshadowed the group’s long-awaited return to profit during the second half, with turnover in the period expected to be around 7% ahead of that recorded at the interim stage.
For the full year ended September, revenue and operating profit in Europe and Americas were at record levels, well above expectations.
The group said it had made considerable progress in reducing the cost base after a detailed review of operations.
Nonetheless, the board said it was confident of delivering further progress in the 2017 financial year.
Shares were more than 13% lower at 41p.