STOCKS NEWS EUROPE-Formation down on liability concerns

STOCKS NEWS Reuters Results diary

Europe [STXNEWS/EU] Real-time Equity News [E] [GB/EQUITY]

14:36GMT 19Nov2008-Formation down over liability concerns

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Shares in Formation Group Plc (FRM.L), the management and professional services company, fall 35.1 percent to 6.0 pence as concerns over a multi-million pound property development overshadow better than expected full year figures.

The group says it may be liable for an amount of up to 11.6 million pounds after a subsidiary of Landsbanki was put into administration last month. Formation was acting as investment adviser for the developer and has underwritten a loan note agreement to cover the financing.

Investec Securities says that while underlying profits were up by over 180 percent, the results have been tarnished by this news and the potential liability.

"While the group's businesses continue to perform strongly, uncertainty surrounding the Aldgate East liability leads us to downgrade our recommendation from a buy to a hold," it adds.