Charter International Falls After Profit Plunges 58% (Update2)

http://www.fxfxfx.com 2010-02-20 23:26:05

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Charter International Plc, Europe’s biggest maker of welding gear, fell the most in eight months in London trading after saying full-year profit plunged 58 percent and it is investigating possible “irregular payments.”

Charter dropped 6.9 percent, the most since June 15. Net income fell to 63.5 million pounds ($97.8 million), from 150.2 million pounds a year earlier, the London based company said today in a Regulatory News Service statement. Revenue dropped 12 percent to 1.66 billion pounds.

Results at the company’s Howden gas-handling unit will be “a little softer” in 2010 from last year, Charter said. The company has started an investigation into the “possibility that irregular payments” were made in connection with an attempt to obtain business by an overseas subsidiary of the unit in an emerging market, Charter said.

The investigation involves “one Howden subsidiary that is involved in selling into one emerging market,” Chief Executive Officer Michael Foster said today in a telephone interview. The investigation began on Feb. 17 and “we have no reason to believe that this is a material issue,” Foster said, adding that the probe should be concluded within three weeks.

“The initial market reaction was probably mainly due to the surprise of the payment irregularities,” Jonathan Hurn, an analyst at KBC Peel Hunt Ltd. in London, who has a ‘buy’ rating on the stock, said in a phone interview. “Anything like that always affects business, but there were also some people expecting a more positive trading statement today and that didn’t happen.”

Charter retreated 51.5 pence to 692 pence. The stock has fallen 4.1 percent this year, giving the company a market value of 1.2 billion pounds.

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