S&P puts Akerys on watch

Standard & Poor's said it placed on CreditWatch with negative implications Akerys Holdings SA's BB credit rating and its BB- rating on €300 million floating-rate notes due 2014.

The watch follows the company's weaker-than-expected half-year results, as well as a downward revision in its operating profit guidance for the fiscal year ending June 30, according to the agency.

The performance reflects a weakening operating margin in its real estate development division and more challenging housing market conditions in France, S&P said.

Ratings reflect the company's aggressive financial profile and lack of geographic diversity, as well as the property development industry's cyclicality, working-capital-intensity, low barriers to entry and highly fragmented nature, the agency said.

These negative factors are partly mitigated by Akerys' good cost management and prudent risk policies and the added benefits derived from providing ancillary financial services, S&P said.

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