MARC HASENFUSS: ELB’s shocking trading update
ELB’s fortunes are in tatters after it took a severe beating with its recently awarded Gamsberg zinc project
I made a painful mistake recently in accumulating a few ELB Group shares at about 850c — before the engineering services and equipment specialist issued a shocking trading update a few weeks ago. I made the rookie mistake of thinking the market had got it wrong in marking down ELB — a business I have come to know as a solid operator whose (mostly) consistent profits are backed by a well fortified balance sheet — too harshly. Those characteristics might not have changed, but ELB’s fortunes are in tatters after it took a severe beating with its recently awarded Gamsberg zinc project. I certainly had no inkling things were going awry at Gamsberg, with neither the last annual report nor the interim report to end-December 2018 even making mention of Gamsberg, let alone signalling potential hitches. The 2017 annual report did note briefly that the award of the Gamsberg project at the end of 2016 was a "significant" contract that would deliver positive returns to the business over its life...
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