Fenner Plc, a maker of conveyor belts for the mining industry, has warned it might miss market expectations for full-year profit.
The company has raised concerns due to weakness in the US coal sector and its failure to clinch an Australian iron ore contract.
Fenner, which has been hit by a slowdown in the global mining industry, said underlying pretax profit would be 10 – 15% lower than Bloomberg's current market estimate of £77.6 million ($129.72 million).
Shares in the company tumbled following the company’s announcement. The company was the top percentage loser on the FTSE 250 index, after its share value fell by more than 15%.
"The lion's share of this impact has to be attributed to North America," said Richard Perry, chief financial officer.
Underlying pre-tax profit was expected to be flat in 2015 at Fenner's North American conveyor belt business, he added.
Analysts predicted that the outlook for Fenner would struggle to improve with little uptick expected in the mining sector.
"Whilst some may be tempted to view today’s warning as the final downgrade in the cycle, it is worth noting that there is now even more discussion amongst mining commentators that coal miners will now need to cut production to support commodity prices which have fallen heavily" said Matthew Spur, analyst at Espirito Santo Investment Bank.
"We are not seeing evidence to support expectation of a reversal in fortunes, particularly in coal markets, over the course of the next twelve months."
Edited from various sources by Sam Dodson
Read the article online at: https://www.worldcoal.com/handling/30052014/profit_warning_issued_by_fenner_915/