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Shares in Basil Read slump as it warns of loss

Shares in the construction firm plunged 23%.

JOHANNESBURG – Shares in  Basil Read Holdings slumped by nearly a quarter on Tuesday after the construction firm said it would swing to a full-year loss.

Basil Read shares plunged 23% to R1.9, the lowest since they hit R1.77 on Dec. 1, which in turn was the lowest since September 2005 and a fraction of its record high of R32.7 in October 2007. Shares closed down 18.95% to R2.01 in Johannesburg.

The company, which had headline earnings per share of 143.87 cents in 2015, said it would report a loss of between 80 cents to 98 cents per share for 2016. The loss for continuing operations would be 35 cents to 42 cents a share, it said.

Basil Reed said its operating profit had been hit both by losses at its Olifant River water resource development project and a R41 million ($3 million) charge, which was part of a settlement with the South African government.

Antitrust authorities imposed a penalty on the construction sector in 2013 for collusion in tendering processes. Besides the fine, seven firms agreed to contribute a total of R1.5 billion over the next 12 years to a fund to develop skills and give black South African workers a bigger role.

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