Keller shares plummet as Malaysian cutbacks prompt profit warning
Construction services business Keller has warned on profits amid Malaysian Government spending cuts and other problems in its Asia-Pacific arm, sending its market value down by a third.
The London-listed company, which has worked on high-profile projects including Crossrail and the London 2012 Olympic Park, said it now expects the unit to lose between £12m and £15m this year, compared with previous expectations of a “small profit”.
The problems stem chiefly from its Malaysian business, which has been hit by the new prime minister Mahathir Mohamad’s decision to scrap a number of Chinese-funded infrastructure projects, including a $20bn rail link.
Keller said the profits downgrade was also the result of project reassessments carried out by the newly-appointed bosses of its south-east Asian arm and its Waterways business in Australia. It has now put both units up for review.
The FTSE 250 company said the rest of its business, which spans Europe and North America, was still trading in line with expectations. The Asia-Pacific arm accounts for around 20pc of Keller’s revenues.
Having nosedived as much as 32pc in early trade, Keller’s shares were changing hands for 706p in mid-afternoon, down 27pc.
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