management outllook was bullish pe 11.85 atm, page-9

SMH article:

THE harsh punishment given to to United Group's share price is an ominous warning to any company preparing to report a below-par result this profit season.

Shares in the engineering, rail car manufacturing and outsourcing firm plunged 25 per cent, or $3.60 to $10.89, yesterday after United reported a 46 per cent lift in interim net profit to $51.5 million.

"Clearly we're in a volatile market, in volatile times and clearly we have had a volatile response to a slightly disappointing result," said a shaken United chief executive, Richard Leupen.

"We were below what they thought we were going to do and they were unforgiving," he said, noting the result was about $10 million below some forecasts.

United also trimmed its full-year forecasts from 50 per cent net profit growth to about 40 per cent. The company said it still expected to achieve 15 to 20 per cent "organic" profit growth following its acquisition of the US facilities management firm UNICCO last year.

"It's our job now to take the medicine and get on with things," Mr Leupen said. Shares in the company have halved since their November $21.87 high. Countering the gloom, Mr Leupen said all of his company's division had record order books and record revenues.

"Most of the numbers in United's data are record numbers," he said, pointing out his company's record $6.7 billion order book.

He said the disappointment stemmed largely from strike-induced delays in the construction of the Perth Metro and a bridge-design contract in Sydney.

Despite $590 million being slashed off his company's market capitalisation yesterday, Mr Leupen said he was not surprised by the market's reaction.

He said it was "pretty close to my expectations".

However, he took a swipe at the "totally mischievous" rumours about the financial health of the US real estate business Equis, which United acquired for $163 million in mid-2006.

"There's a lot of misinformation out there about us and I can't count them all," he said, without specifying what the rumours were. "They are concerned about the US property business."

Mr Leupen said Equis had record sales and had "performed beyond expectations".

He said he was not aware of any issues that could lead to further downgrades. He said the $12 million hit United took on the two contracts in Sydney and Perth was the extent of its issues.

"Hopefully we will get some more analytical assessment of our earnings," he said, noting the current panic in sharemarkets.

Mr Leupen even argued his company was recession-proof, because there tended to be more outsourcing in a weaker economy.