The Service Stream Limited (ASX: SSM) share price sank to a new 52-week low on Tuesday. Shares in the Aussie network service provider fell 4.1% to close at $0.94 per share. That’s the lowest level in the last 12 months as the company’s tough start to the year continues.
Why is the Service Stream share price under pressure?
Service Stream has been sliding in value this year and closed with a $402.2 million market capitalisation on Tuesday afternoon. It means the Service Stream share price has now slumped 56.5% in the last 12 months in a tough period for shareholders.
A soft half-year financial result in February saw shares in the utilities and telecommunications company fall 20 per cent in one day. Service Stream’s earnings reported a 17.7% drop in revenue to $409.9 million. That saw group profits fall 40.5% as the company booked a $16.2 million net profit after tax.
A 37.5% dividend cut to 2.5 cents per share didn’t help matters as investors sold down. The coronavirus pandemic has disrupted asset construction, operations and maintenance and impacted negatively on the group’s financials.
That has been reflected in the Service Stream share price woes in 2021. Yesterday saw the broader Aussie share market get smashed as investors got spooked by recent highs, as well as concerns over heightened inflation and higher interest rates.
The S&P/ASX 200 Index (ASX: XJO) closed 1.1% lower at 7,097.00 points on Tuesday. The Service Stream share price was caught in the carnage and sank lower, albeit it is no longer inside the ASX 200. That was despite no new announcements from the company since 14 April and having traded ex-dividend on 25 March 2021.
The current 52-week low is tough for investors to swallow after recent losses. However, management did provide some hope in its February half-year result. Service Stream noted a “strong pipeline of organic growth opportunities” with a view to developing long-term performance.