The shares, suspended on Wednesday, fell from 129p to 63p, as investors and analysts scrambled to sell. Turnover amounted to 26 million shares, nearly 7 per cent of the total in issue.
Followers of the company believe the position of Stuart Greenwood, finance director, to be untenable. Some think Bill Rooney, the founding chairman and chief executive who saw the value of his 8 per cent stake slump by pounds 18m yesterday, will also have to resign.
Spring Ram admitted that results for 1992 would be 'significantly less than current market expectations'. Pre-tax profits, put at not less than pounds 26m, would be 40 per cent lower than expectations and a third down on 1991's pounds 37m.
'There have got to be major changes. It is a very, very unhappy situation,' one institutional fund manager said.
Spring Ram said it was making 'certain changes to the company's accounts in response to the market's and the accounting profession's increasing expectations for accounting rigour and prudence.'
The company appears to have admitted that it was intending to take profits on sales of stock in 1992 that had yet to take place. It said 'profits amounting to pounds 5.6m on certain contracts will now fall into 1993'. It also signalled that changes would be made to take into consideration of the new FRS3 accounting standard, while the treatment of government development grants would be altered. In addition, pounds 4m of start-up and development costs would be written off.
Michael Foster, an analyst at the stockbrokers Grieg Middleton, said: 'Spring Ram is still a sell at 60p. The statement does not address the real problems in enough depth.'
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