PureCircle share price plunges over audit issues
Investors in sweetener firm PureCircle have been left with a sour taste in their mouth following several days of sharp falls in its share price.
The food producer surprised the City late last week when it postponed its annual results and warned that auditing issues could cost it up to $30m (£24.15m).
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Purecircle and its advisers have launched a probe that is expected to last several weeks after its auditor PwC identified “a potential issue relating to the classification and valuation of certain inventory items”.
The announcement sent shares crashing by almost a third on Friday and today the stock’s price has fallen a further 10 per cent.
Shares in the company are trading at their lowest level in more than seven years, hitting 151p today.
“You can understand why investors are running for cover after Purecircle’s decision to delay the release of its results following the launch of an audit investigation into the value of some of its assets,” said Russ Mould, investment director at AJ Bell.
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He told City A.M.: “There is the old saying that ‘never discover just the one cockroach’ and investors are taking no chances as other firms with audit woes, such as Sports Direct, have been poor performers this year.
“The uncertainty is likely to weigh in the shares, even if the artificial sweetener market continues to have great long-term potential, and investors are only likely to take another look once they know where they stand and the final report is published.”