* Listed in May 2014
* Warns FY16 NPAT down 10 pct vs up 9 pct analysts
* Mining slowdown affecting services industry (Updates throughout, adds shares, analyst comment)
By Byron Kaye
SYDNEY, Dec 2 (Reuters) - Australian cleaning and catering firm Spotless Group Holdings Ltd SPO.AX issued a profit warning 18 months after its initial public offering, sending its shares down by over 40 percent and extending a series of private equity exits to run into snags.
In a statement, Spotless said it expects net profit to fall 10 percent in fiscal 2016 because of tighter economic conditions and tender decisions being delayed or deferred. The firm maintained that revenue will continue to grow.
The company's prospectus before listing in May 2014 had no forecasts for 2016. Analysts polled by Thomson Reuters Starmine had expected the firm's net profit to grow 9 percent. On Oct. 22, the company said it expects to "materially exceed" the prior year's results in 2016.
On Wednesday, spotless shares fell as much as 42 percent after the profit warning, trading below their A$1.60 issue price for the first time at A$1.27.
"It seems the share price is holding together for the first 12 to 18 months, and then the bad news really comes out because the underlying nature of the business isn't as strong as what it seemed at the time of the float," said Danial Moradi, an equity strategist at Lonsec Stockbroking.
The profit warning is also reviving concerns that swift private equity IPO exits are leaving investors exposed to companies without long-term growth plans after being freshened up for sale.
In August, Spotless said Pacific Equity Partners, the private equity firm which listed it after less than two years, had sold out its stake at A$1.80.
A spokesperson for Pacific Equity Partners declined to comment.
The profit warning is also a sign the effects of a mining downturn in Australia are reaching beyond the engineering and machinery services firms which directly rely on it and into the broader services sector.
On Nov. 30, electronics retailer Dick Smith Holdings Ltd DSH.AX saw its shares plunge 33 percent after issuing a profit warning. The announcement came two years after private equity firm Anchorage sold it. On Wednesday, the shares bounced 21 percent to A$0.42, having listed at A$2.20.