Charter shares tank after profit warning
SHARES in Charter International, the tool and equipment maker, fell by as much as 28 per cent yesterday after it issued a profit warning.
Charter said full-year results would likely fall short of expectations, hurt by weakness at its core welding tools unit ESAB.
The firm said rising input costs combined with more competition hurt ESAB, which accounts for more than 60 per cent of total group revenue.
Charter said it expects the unit’s first-half trading performance to be in line with the second half of 2010.
The FTSE 250 company said it has identified cost savings of £30m, which it expects to achieve within 12 to 18 months. It will take a £25m charge in relation to the cost cuts.
But the firm said trading at its other unit, Howden, which makes air and gas handling equipment, was “somewhat” ahead of previous expectations.
Analysts at Investec said they expected to cut their annul profit forecast by 10 per cent to £152m-£155m.
Shares in Dublin-based Charter recovered slightly in later trading to close 25 per cent down at 538.5p yesterday, valuing the business at £1.2bn.