Britain's technology industry received another blow yesterday after both Terence Chapman, an IT consultancy, and IDS Group, a software business, issued profit warnings.
Shares in Terence Chapman fell 17 per cent, pushing the stock to a new low of 41p. IDS lost 18 per cent to 59p.
Terence Chapman blamed difficult market conditions for the alert, having already warned last month that its performance in the second half of the year would fall short of market expectations.
"The company has experienced a further weakening of market conditions and in particular a curtailment of a number of significant projects in the final two months of its financial year," said the company, run by chairman Terry Chapman.
It now expects that its performance in the year ended 31 August will fall "substantially" below current expectations. Analysts are now predicting profits of just £600,000 for the year compared with previously downgraded profit forecasts of around £2m.
The company, which floated on the market just two years ago at 135p a share, said it did not foresee a short-term upturn in prospects.
Meanwhile, IDS Group said slower-than-expected sales of its fleetware software meant that its full-year outcome will be below current market expectations. The company reported a six month ended 30 June pre-tax loss of £5.2m on sales of £16m.
While the company said it had a number of new licence prospects for the second half, it was taking a cautious view on those deals being finalised due to the slowdown on IT spending.
Despite the news, the company's chairman and finance director bought shares in the business.Reuse content