Delphi shares slump as IT ambitions are scaled back
Friday 04 September 1998
Delphi shares lost 21 per cent of their value, slumping to a three-year low of 306p on the news. The shares peaked at 827p in March this year.
Tony Reeves, the chairman of Delphi, said the group had decided to seek a strategic partner for its US subsidiary, Alpine, which suffered a loss of pounds 1.4m in the first six months of the year.
Mr Reeves said Delphi had underestimated how much investment the subsidiary, which manages clients' computer systems from a remote location, required.
"It hasn't worked because the technology has taken us into a new service which has taken much longer and much more money than expected to develop," Mr Reeves said.
The group is also planning to sell its 30.8 per cent stake in Decan, the French IT solutions business.
Mr Reeves said Delphi had received three offers for Alpine, and hopes to complete a sale by the end of the year. But he said it was too early to tell whether the company would suffer a loss on the sale. Delphi bought Alpine for $25m (pounds 15m) in 1996.
Ingrid von Hentschel, IT analyst at Beeson Gregory, said: "In order to become a solutions company, Delphi would have had to put too much money in. They didn't have the money and they didn't have the management." However, she backed Delphi's decision to pull out. "It's a rational decision at long last."
Mr Reeves said Delphi's priority now was to concentrate on its staffing operations.
He added that the group was looking to strengthen the management of its staffing business by recruiting a new chief executive for its American division, which had also suffered from the difficulties at Alpine.
Ian McKellen and Patrick Stewart bromance continues: X-Men star gushes about 'pussy cat' BFF Patrick Stewart
David Cameron stung by jellyfish: PM hurt after ignoring advice of locals while on holiday
South Korea ferry: Vice principal rescued from sinking ship found hanged
Hollande's affair: Catherine Deneuve and Sophie Marceau in war of words over President's relationship with Julie Gayet
Kim Jong-un, crowds and contraband: Inside North Korea with the the Pyongyang marathon winner
The food poverty scandal that shames Britain: Nearly 1m people rely on handouts to eat – and benefit reforms may be to blame
US Navy christens huge $3 billion destroyer ship USS Zumwalt that appears as a fishing boat on enemy radar
Scottish independence: It is the English who should be on their knees, begging the Scots to vote ‘No’
Nigel Farage fatigue? Half of voters ‘immune’ to Ukip’s appeal
Nigel Farage: I’m taking on the status quo, and the Establishment’s fighting back
Refugee facing deportation from Sweden saved by fellow passengers refusing to let plane leave
- 1 KFC 'sorry' after lesbian couple are kicked out of Bath restaurant for 'heavy petting'
- 2 Dylan Tombides: West Ham confirm 20-year-old striker has died after battle with cancer
- 3 24 people applied for the 'world's toughest job', here are their interviews
- 4 'Sinful': Video of British Muslims dancing to Pharrell Williams's hit Happy comes under attack
- 5 PFA Player of the Year: Luis Suarez, Daniel Sturridge and Steven Gerrard all nominated as Liverpool dominate award shortlist
iJobs Money & Business
£150.00 per week: QA Apprenticeships: This company has been providing on site ...
£221.25 per week: QA Apprenticeships: This company is a well established Inter...
£40000 - £50000 per annum: Harrington Starr: Client Relationship Manager - SQL...
£35000 - £50000 per annum: Pro-Recruitment Group: Take your chance to join the...