(Reuters) - Keller Group Plc (KLR.L) Chief Executive Officer Alain Michaelis has decided to step down, the engineering contractor said on Friday, while flagging slower-than-anticipated growth in its key North America business for the rest of the year.
Shares of the company were expected to open down as much as 5%, according to pre-market indications, as investors were concerned over the abrupt departure of Michaelis, who has helmed the company for four years.
The company, however, reaffirmed its expectations for the year, saying it was “on track” to win new contracts in Australia, particularly during the fourth quarter.
Michaelis oversaw the company’s plan to cut costs and reduce exposure to unprofitable markets. Keller has also been reviewing its Asia Pacific business since October, after a decline in new orders from Southeast Asian markets.
The company, which provides ground improvement equipment and cable systems to the construction industry, said Chief Financial Officer Michael Speakman will take over as interim CEO from Oct. 1, adding that the process of recruiting Michaelis’ successor has commenced.
Analysts at Jefferies said uncertainty in the company’s North America business “strikes a cautious tone”.
“While we do not see explicit reasons in the (Friday’s) statement to lower our forecasts, we believe the risks to second-half earnings and the CEO’s abrupt departure may concern investors,” the analysts wrote in a client note.
The company had said in July that first-half margin declined year-on-year due to higher costs from “unfavourable” weather.
Reporting by Justin George Varghese in Bengaluru; Editing by Saumyadeb Chakrabarty