McDonnell Information Systems, the computer software group, is in fence- mending talks with institutional shareholders in the shadow of halved full-year profits less than 12 months after going public.
Chief executive Jerry Causley, who upset investors by issuing two trading warnings since flotation, revealed that in 1994 profits slumped from £21.2m to £9m. Finance director Ian Knox left the company in January.
Mr Causley yesterday admitted he had his work cut out in winning back City credibility, as MDIS's institutional roadshow, taking in the likes of Prudential, Mercury Asset Management, Commercial Union and Fidelity, swung into action. The company, announcing a total dividend of 6.25p after a 3.95p final, blamed the profits setback on delays in securing orders from public sector clients, including local councils and the police, allied to disappointing orders for its new PRO-1V IBS banking system.
"We now realise the banks are very conservative and it will take more time. We are now more cautious with our revenue projections," Mr Causley said.
Operating profits in the public sector division fell to £22.4m (£25.1m), while the division specialising in work for the financial sector plunged into the red to the tune of £2.3m against a £3.9m profit last time.
There was better news from the commercial and industrial division, with profits rising 1.3 per cent to £13.4m.
MDIS said it had addressed its problems by taking £7.7m of costs out of the business, including 100 redundancies, and reducing burgeoning research and development costs - £19.2m in 1994 - by 20 per cent this year.
The company said order books were strong and it had net cash of £8.6m at the year-end. Ian Hay Davison, chairman, said: "The disappointing 1994 profits should not overshadow the strengths of MDIS as a leader in the computer solutions market."
The shares added 6p to 75p compared with a flotation price last March of 260p.Reuse content