CIU.L Share News (CIU)

Energy support services firm Cape said it was unlikely to meet expectations in 2012 after trading in Australia deteriorated sharply in the second quarter.The deterioration in performance in its Far East/Pacific Rim business will have a significant effect on overall group performance in the near term, the company said.This means it is unlikely to meet previous expectations for 2012, with problems likely to continue into 2013, despite a restructure of this part of its business.The firm said that following a review of this business, it had become clear that the trading performance for the Far East/Pacific Rim Region for the remainder of the year would be well below management's previous expectations.Lower revenue, combined with increasing pricing pressure, had led to operating margins being significantly lower than previously expected, Cape said.With delays in major project work in Australia now apparent, it expects no improvement in activity levels in the near term. Management now expects revenue from this region for the year to 31 December 2012 to be slightly less than that of 2011 and operating margin, before the impact of any restructuring, to reduce to approximately half of 2011 levels."In the Far East/Pacific Rim, the group is more exposed to the construction support services cycle than in other more mature regions in which Cape enjoys leading market positions, underpinned by a solid maintenance support services base with multi-year contracts," the company said."Whilst capital spending in the Far East/Pacific Rim region is expected to benefit Cape strongly over the medium term, the timing of work releases on the major projects remains uncertain."The profit warning will be a major headache for Chief Executive Joe Oately, who only joined the firm in June.He replaced Martin May at Cape, who quit in March 'to pursue a new challenge'. As recently as May the firm had said it was confident of meeting expectations in its full year figures.