Good morning! I'm writing this on my laptop in a hotel room in Vienna, having decided to grab a cheap deal for a few days' change of scene, with friends. Things got off to a rather painful start when I had an allergic reaction to some radox shower gel, and ended up enduring the flight with my nether regions stinging very badly!

To make matters worse, I hardly got any sleep, due to one of my party turning out to be a human foghorn in the snoring department (a small group of us hired a family room, to save money). Never mind, it's all part of life's rich pageant I suppose!


Lakehouse (LON:LAKE)

Share price: 38.4p (down 54.3% today)
No. shares: 157.5m
Market cap: £60.5m

Profit warning - bad luck to any readers who got caught on this one. I reported on the company here on 10 Dec 2015, concluding that it looked an accident waiting to happen - a low margin group of contracting businesses, with little balance sheet strength, and growing by acquisition. The worst aspect was that it's a recent IPO (Mar 2015) and the original shareholders cashed out some of their chips in the IPO - it's rarely a good sign if the people who know a business best are cashing out.

Today's profit warning mentions several headwinds - e.g. that social landlords are being required to reduce rents by 1% p.a. for the next 4 years. That's the first I'd heard of this, which has led to a reduction in orders for Lakehouse, as you would expect. It would be interesting to find out when this lowering of rent requirement was being mooted - before or after the IPO?

Insulation, and smart meter contracts are also coming through at a lower level than expected. So all in all, a series of unfortunate headwinds, all of which were no doubt completely unforeseen at the time of the float in Mar 2015.

Quantifying it is rather difficult, as the company's last results had so many adjustments. Today it says;

In light of the above headwinds the Group now expects the financial outturn for the current year to fall short of its previous expectations and to see a reduction on last year's profit level.

Current year forecast is for 12.5p EPS, so the actual result (y/e 30 Sep 2016) is going to be below…

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