Bottom Line: Scantronic sceptics

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The Independent Online
IT IS hardly surprising that Scantronic has lost almost all its credibility with investors and bankers.

Alarm bells began ringing for the Scantronic share price in March when it was trading in the mid-eighties.

Even before a trading statement warning of lowered profit expectations in June, it had tumbled to 60p, and a second statement three weeks ago carrying news of soaring borrowings, a departing finance director and no final dividend sent the shares crashing to 26p.

They lost another 6p yesterday as the company unveiled further write-offs on its 1993/4 figures and warned of first-half losses which outside analysts reckon could be anything betweeen pounds 1m and pounds 1.5m.

Relations between Scantronic and its bankers, Barclays, appear to have fallen into such a poor state that Chris Brookes, chief executive, has had to give a personal guarantee for the company's banking facilities.

To get the increased facilities Scantronic's directors, senior management and friends have put up pounds 1.6m for new shares at a knockdown 10p. These will be offered via a clawback to existing shareholders.

Any support from investors must surely require wholesale changes in the boardroom, given the number of warning signs.

Scantronic is a UK leader in its markets with sales of pounds 50m, currently valued at only a few million pounds.

But predators will need as much reassurance as battered shareholders.

(Graph omitted)

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