In an unfortunate turn of events for shareholders, my article earlier this morning questioning whether ALS Ltd (ASX: ALQ) was preparing for an imminent fall proved to be prophetic when the company announced that profits were significantly below expectations for the first half of 2014.
In happier news, speculative bauxite miner Australian Bauxite Limited (ASX: ABX) – coincidentally my top stock pick for September – today announced approval of a mining lease for its Tasmanian tenements, a development that could see the company multiply in size.
Finally, Bank of Queensland Limited (ASX: BOQ) announced today that it has settled with all its remaining Storm Financial customers from when that organisation collapsed several years ago.
ALS Ltd
Back in July company chairwoman Nerolie Withnall informed investors that the company expected to earn in the vicinity of $74 million profit for the first half of 2014, a decline of 26% on the previous year.
In a further update to the market today, ALS' Managing Director informed shareholders that the company had revised its earnings further and was expecting to bring in only $64 million by the end of September, a further 16% decline on previous guidance.
Shares have since dropped a further 14% unfortunately confirming my belief that ALS was overvalued and subject to further downwards pressure.
Australian Bauxite Limited
A pet favourite of mine and one of the better speculative prospects to play off immediate demand for bauxite, Australian Bauxite has risen 6% today since the issue of its mining license.
With a number of factors working in its favour including very strong bauxite demand, huge reserves, numerous unexplored tenements and proximity to road, port and alumina smelter infrastructure, Australian Bauxite could well become one of Australia's pre-eminent bauxite exporters in future years.
With production slated to begin in late 2014, I'm certainly not betting against it.
Bank of Queensland Limited
In a note that's more for reader interest than of market relevance to the company, Bank of Queensland today settled its Storm Financial lawsuits with ASIC for $19.7 million, $17 million of which will be paid directly to Storm investors.
After tax the total cost to BOQ is expected to be $22.1 million including all legal costs and other provisions.
The financial impact is immaterial to BOQ meeting its Common Equity Tier 1 operating target and will have no effect on the board's upcoming dividend determinations, with full year 2014 results to be released on 9 October 2014.
It's good to finally see a conclusion to the financial collapse which received massive media coverage in my hometown of Townsville (also Storm's base).
Unfortunately the settlement places no lasting penalty on the banks involved, and I highly doubt it is the last scandal of its kind despite the huge potential to destroy lives and livelihoods.
Investors thus must take care to find a trustworthy adviser, and as ever with these things knowledge is power.
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