The results will be negatively impacted by Iraq's inability to fund the training of its security forces. From the linked Times of London article:
ArmorGroup has 1,500 protection officers in Iraq, making it the biggest private security firm in the war-torn country.
"The protective security business in Iraq, particularly in Afghanistan, Nigeria and Latin America have all out-performed original expectations," Mr Seaton said. "We are actually very marginally below expectations. You’re talking about a couple of hundred thousand pounds."
Mr Seaton said Iraq accounted for 50 per cent of ArmorGroup's revenues, down from 60 per cent in 2005, but said growth there had remained fairly constant. "Iraq is still an important part of the business," he said. "Between 2005 and 2006, it's toned down in percentage terms despite increasing in dollar terms."
He added there had been strong growth in Afghanistan and Nigeria in particular, which he expected to continue in 2007.
I don't know if the shares will continue dropping or not. Unless they do, we've still racked up a nice gain since buying the stock in September. But as I've repeatedly cautioned, this is a relatively small company with not a lot of share float. Some days it trades hundreds of thousands of shares, other days it trades less than 10,000. So we can see some wild swings.
I remain cautiously optimistic and am maintaining the entire position.