Rungepincockminarco issues profit downgrade

The mining software developer slumps after warning the market about a 84% fall in pre-tax earnings.

Rungepincockminarco (RUL) suffered its worst fall in two months after the mining software developer issued a profit warning this morning.

The stock fell 10.5% to 47 cents as management flagged an 84% plunge in 2012-13 operating earnings before interest, tax, depreciation and amortisation (EBITDA) to $1.9 million on the back of a 26% drop in net operating revenue to $73.9 million.

Investors who read the article Big expectations for small caps on July 10 would have seen it coming as market earnings expectations for the stock were clearly too high in light of the challenging environment.

Mining companies are cutting back on spending and Rungepincockminarco’s large exposure to new mining projects, particularly in the more distressed coal and gold space, meant it would be a stretch to assume that full year EBITDA could match the $3.7 million consensus estimate recorded on Bloomberg.

The company is cutting costs and pushing more aggressively into new geographical markets such as Russia and Asia.

Rungepincockminarco, which has $6.9 million in cash and no debt, will report its results on August 22.

Rungepincockminarco is part of the Uncapped 100.

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