Public Sector Portfolio Watch - Update 3 - May Gurney profit warning

Been a while since looking at those companies that rely heavily on public sector spending.  AIM company May Gurney came out with a profit warning this morning that so far today has sent the shares down around 44%.  This tells us a couple of things about how quickly the share price of some companies can fall very quickly.  First, it relies heavily on one source of income, around 60% from the public sector.  Second, as a smaller company the share price volatility can often hit hard and fast on the downside, many small investors in this company probably don't even know that the share price has fallen today. They will get a shock when they return home from work and check this evening and probably wonder what has happened. Some buy and hold fundamental investors in this share who rarely check their portfolio might not find out for weeks.

Infrastructure and maintenance firm May Gurney Integrated Services Plc (MAYG.L) issued a profit warning and said its chief executive of four years would leave the company immediately, sending its shares down more than 40 percent.

The company, which helps maintain Britain's roads, rail and utilities services, said it would "significantly" underperform its original expectations for the year.

It cited "serious" but unspecified operational issues related to the closure of its facility services unit and weakness at its waste recycling business for the warning.

The company makes 60 percent of its revenue from the public sector and is hoping that a government spending review by the end of the year will result in more business being sent its way.

reuters.com

And if you happen to be looking for key words in company reports or news, then this one is full of red flags.