November 12, 2012 / 11:51 AM / in 5 years

UPDATE 1-Cape warns on full-year profit, CFO leaves

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Nov 12 (Reuters) - Cape Plc, which provides painting and insulation services to miners and LNG companies, issued a profit warning on a slowdown in its onshore Australian business and said its CFO would leave, sending its shares down as much as 36 percent.

The stock, the top percentage loser on the London Stock Exchange on Monday, lost all of its gains since Aug. 30, when it said it was on track to meet its revised expectations.

The company has been struggling with slow progress at an LNG project in Algeria and worsening margins in its Australian business, and has warned on its profits earlier this year.

Cape also said on Monday that it recognised a 1.5 million pound ($2.39 million) provision related to potential bad debt with a customer in Saudi Arabia reported to be in financial difficulty.

The company, which is reviewing its Australian business, said it had identified a number of unspecified issues related to the valuation of certain balance sheet items.

“This review is expected to be complete before year-end; until then there remains some uncertainty over the full year performance for this business,” the company said.

Cape does not disclose how much of its revenue comes from Australia, but its Far East/Pacific Rim business, which includes Australia, accounted for about a third of its revenue of 371.6 million pounds ($591.19 million) for six months ended June.

The company also said Finance Director Richard Bingham would leave the company with immediate effect, making him the second executive to leave Cape this year after Chief Executive Martin May stepped down unexpectedly in March.

Cape also said work at the LNG project in Algeria is progressing slower than anticipated and that it is starting talks with its client for compensation due to the delays.

The company had issued a profit warning in May after a review of a project in Arzew, Algeria unearthed additional costs. ($1 = 0.6286 British pounds) (Reporting by Karen Rebelo and Abhishek in Bangalore)

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