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UPDATE 1-Keller says to take 30 mln stg charge in first half
July 30, 2014 / 3:45 PM / 3 years ago

UPDATE 1-Keller says to take 30 mln stg charge in first half

(Adds analyst comments; updates share price)

July 30 (Reuters) - British construction company Keller Group Plc said it would take a charge of 30 million pounds ($51 million) in the first half, related to a dispute on a project completed by its unit in 2008.

The company’s shares fell as much as 2.8 percent on Wednesday, making them one of the top percentage losers on the FTSE-250 midcap index.

Keller said the dispute relates to purported defects in a floor slab at a warehouse for which its unit, Keller Ltd, undertook the design and construction of the piling.

The company, which built the foundation for London’s Olympic stadium, said the claims were currently the subject of litigation.

“The outcome is uncertain but may be significantly less bad than the headline suggests (it may be covered in full by insurance),” analysts at Liberum said in a note to clients.

“The shares are cheap, offer substantial margin recovery potential and the balance sheet is strong,” they said, adding that a drop in the stock’s price was a buying opportunity.

Keller said the charge was before taking into account recoveries under applicable insurances.

The company is scheduled to report first-half results on Aug. 4. Its pretax profit jumped 70 percent to 74.1 million pounds in the year ended Dec. 31.

Shares in the FTSE-250 company were down 2.8 percent at 887 pence per share at 1526 GMT. ($1 = 0.5916 British pounds) (Reporting by Aashika Jain and Aastha Agnihotri in Bangalore; Editing by Savio D‘Souza)

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