Active Imaging shares drop below placing price

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Active Imaging, a high tech group floated on the Alternative Investment Market in April, saw its shares dive below the placing price yesterday after it warned that results would be significantly short of market expectations and announced the resignation of its managing director.

The price slumped 18p to 110p, which compares with the 112p flotation, on news that the loss of two key distribution contracts in the US would hit revenues significantly in the group's original Data Cell software reseller business. David Slorach, responsible for the Data Cell operations, has resigned, apparently in response to the problems there.

Raymond Fagan, Active Imaging finance director, said: "Inevitably when these sorts of things happen it takes its toll in personal pressures." He added that Mr Slorach's payoff would not exceed one year's salary, currently pounds 50,000.

Ingrid von Hentschel, an analyst with Beeson Gregory, the group's broker, said first half results, due to be announced next month, would be "absolutely dreadful". She has downgraded her forecast for the current year from a loss of pounds 900,000 to one of pounds 1.9m.

The cancellation announced yesterday of the exclusive contract with Imaging Technology Inc follows on from the earlier termination of a deal to sell its Optimas product. Active Imaging has replaced the business, estimated by Beeson Gregory to represent pounds 1m of expected revenues of pounds 7m this year, with new distribution contracts with two other US imaging companies, Media Cybernetics and Cognex.

Although Active Imaging expects "significant progress being achieved in the remainder of the year", Ms von Hentschel expects Data Cell to have to undertake further work on its software products to make them fully compatible with those of Media Cybernetics, which will hit this year's figures.

However, she has upgraded her forecast for next year to a profit of pounds 500,000, compared with a break-even expectation before, as a result of improved expectations for the British group's Internet imaging product.

It was excitement over the prospects for Active Imaging's intelligent digital cameras which allowed it to raise pounds 5m in the April placing and send its shares soaring to 160p soon afterwards.