Brierty Ltd yesterday produced an unwelcome update on earnings guidance. It’s earnings are going downwards. It has almost matched the loss of value seen by Centro, Allco, and Rams in the past six months.

However, unlike Centro, Allco and Rams, Brierty isn’t a financial group. In fact what makes its poor performance even more remarkable is that it is a Western Australian civil engineer. Who would have though a company operating in the biggest construction and resources boom in our history could perform so badly?

Yesterday’s update was the second earnings guidance in six weeks and seeing that the company only listed on the ASX on 7 December last year, its short public life has been something of a disaster for all concerned, not least the shareholders.

The shares were issued at $1, they rose to $1.85, and yesterday dropped 44% to close at 26 cents after the latest profit downgrade. At $1 the company was valued at $110 million, at $1.85 they were valued at around $203 million, at 26 cents the company is worth just $28.6 million.

In a statement to the ASX yesterday Brierty said that it was issuing a new “pro-forma profit guidance of $3.6 million after tax for the financial year to 30 June 2008”.

“The revised pro forma profit guidance compares with a forecast range of $8.2-9.2 million announced to the market in April 2008 and a pro forma net profit forecast of $10.3 million contained in the Company’s 2007 prospectus,” the company told the ASX.

“The downgrade is the result of higher than expected costs and margin erosion on a small number of significant contracts that have been or will shortly be completed.”

For the downgrade to be a cut on a previous downgrade on the prospectus forecast says enough about the lack of systems. But the first downgrade was given on 16 April, and yesterday’s second downgrade represents a cut of well over 50%.

“Brierty’s forecast revenue for the 2008 financial year of $199 million remains on track, but the increase in costs has eroded the expected margins on the contracts in question,” the company said.

The company said founder, Alan Brierty has informed the board of his decision to step down as Managing Director to concentrate fully on the operational side of the business which he has built up over 27 years.

It’s an old tale: there’s a vast difference between operating as a private company and life on the ASX. It’s also been a small but expensive lesson for Perpetual Trustees which built up a stake of just over 10% or around 1.27 million shares, just before the second downgrade in April.

Ouch!