Perform Group Plc (PER), the online sports broadcaster that runs the Chelsea Football Club’s website, fell the most in almost a year after saying that a changing revenue mix will “modestly” restrain profit growth.
While sales gained 37 percent to 92 million pounds ($140 million) in the first half, advertising and sponsorship is “making up a higher proportion of total revenues than expected, creating some pressure on short-term margins,” Feltham, England-based Perform said today in a statement.
The stock plunged 7.2 percent, the most since July 17, to 540 pence in London, the lowest since May 3. The volume of shares traded was five times the three-month daily average.
“It has been priced for perfection,” Paul Richards, an analyst at Numis Securities Ltd. with an add recommendation on the stock, said in a telephone interview. The investor reaction is “overdone, although it is understandable,” he said.
Until today’s drop, Perform had been the best-performing stock this year in the FTSE 350 Media Index, with a gain of 47 percent. The shares had more than doubled through yesterday since the sports broadcaster’s IPO.
“The change in revenue mix, together with additional rights and other investment, is likely to modestly impact” growth this year in earnings before interest, taxes, depreciation and amortization, Perform said.
Even so, the company is “on track to deliver another year of strong revenue growth,” with contracts amounting to 166 million pounds so far this year, compared with 131 million pounds at the same point last year, joint Chief Executive Officer Oliver Slipper said in the statement. The company has more than 17,000 live events under contract for this year.
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