UPDATE 2-Charles Taylor warns on FY, shares tank

* H1 pretax profit almost flat at 5.7 mln stg

* Adjusted EPS 10.02p vs 14.19p last year

* Management services hit by weak public sector business

* Altium Securities cuts price target to 209p

* Shares down as much as 22.5 pct (Recasts, adds analyst comments; updates share price)

Aug 18 (Reuters) - Insurance consultancy Charles Taylor Consulting Plc (CHAT.L) warned full-year earnings would miss earlier estimates, after its first half was hit partly by weak public sector business, sending its shares down 22.5 percent.

Analysts on average expect a full-year pretax profit of 16.2 million pounds, on revenue of 103.1 million pounds, according to Thomson Reuters I/B/E/S.

The company said operating profit at its management services division, which manages mutual insurers including investment management and underwriting services, was hit by weaker performance from the UK public sector business and effects of the U.S. recession on the risk consulting business.

Britain's new coalition government has vowed to slash spending in a bid to drive down its deficit. [ID:nN16271383]

For the six months ended June 30, the company posted a nearly flat pretax profit of 5.7 million pounds ($8.9 million). Adjusted pretax profit was down about 1 percent to 6.8 million pounds.

Adjusted earnings per share fell to 10.02 pence from 14.19 pence, while revenue rose 6 percent to 48.4 million pounds.

Profit at adjusting services unit -- provider of advice to insurers and shipowners -- fell 33 percent to 2.8 million pounds due to reduced results from its energy and aviation businesses.

"The main issue is in the adjusting division, where work on some major losses has come to end earlier than expected. It's been replaced but at lower margins," analyst Richard Bennett of Altium Securities told Reuters.

Separately, the brokerage reduced its 2010 earnings per share estimates on the company by 27 percent to 22.4 pence and cut the stock's price target to 209 pence from 308 pence.

Charles Taylor, which helps insurers manage business areas such as risk, investment, loss-adjustment, data and claims, maintained its interim dividend at 5.54 pence.

The company's shares, which had risen over 11 percent since the start of the year, were down 50 pence at 182 pence at 0847 GMT on the London Stock Exchange. ($1=.6422 POUND) (Reporting by Tresa Sherin Morera in Bangalore; Editing by Aradhana Aravindan)