Unfortunately for its shareholders, the Murray River Organics Ltd (ASX: MRG) share price is not having a great end to the week.
In early afternoon trade the organic food producer's shares have fallen a remarkable 41% to 61 cents.
What happened?
After the market closed yesterday the company released a trading update. As you might have guessed, it was a bit of a shocker.
Whilst the company's sales performance has been impressive, its lack of progress on planned operating efficiencies has been hugely disappointing.
According to the update these delays have led to higher than forecast FY 2017 operating expenses. As a result, management now expects to generate full-year EBITDA of between $12.5 million and $13.5 million and pro forma net profit after tax between $4.2 million and $4.9 million.
This is especially disappointing considering that in late February the company advised that it was on track to achieve full-year guidance for EBITDA of $15.9 million and net profit after tax of $6.6 million.
Such a sharp downgrade in a short space of time is almost always punished by the market.
Should you buy the dip?
Today's decline means its shares are now changing hands at approximately 11x forward earnings.
While this is cheap and management has stated that it has addressed these issues and expects the benefits to show in FY 2018, I would suggest investors hold off an investment until improvements can be seen.
Until then I would suggest investors look at industry peers Tassal Group Limited (ASX: TGR) or Costa Group Holdings Ltd (ASX: CGC) instead.