The West

Campbell Bros warns of earnings slowdown
Campbell Bros warns of earnings slowdown

Shares in Campbell Brothers have slumped after the chemicals company warned its earnings growth was expected to slow in the second half of its financial year.

Chairman Geoff McGrath told shareholders at the company's annual meeting that while its first half net profit was expected to rise by about a third to hit a record $130-$140 million, that pace of earnings growth would slow.

"This is a very positive start to the current year, but uncertainties and volatility in the global economy and the resources sector in particular may have some negative effect on full year earnings," Mr McGrath, who retired at today's meeting, said.

"As has been our custom for many years, we will provide full year guidance in November when the first half results are released.

"However, it is our expectation that the rate of growth in the second half of this year will not match the growth rate achieved in the first half."

The news sent shares in the company plummeting by more than eight per cent. The stock was $4.22 lower at $47.92 at 12.55pm.

Managing director Greg Kilmister said the group's analytical testing business, ALS, was likely to report flat or slightly lower earnings in the second half.

A scaling back in activity among many junior explorers combined with falling commodity prices and concerns about Europe's debt problems and a slowdown in China's growth were all having an impact on ALS.

Trading conditions for Campbell's environmental analytical services in North America and Australia were also likely to be flat, he said.

However, Mr Kilmister said the company's move into food and pharmaceutical markets in Europe and the diversification of its minerals division had created opportunities.

"Whilst things might be more challenging over the next 12 months we remain confident in our ability to increase market share in what may be contracting markets," he said.

The West Australian

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