Intec plunges on profit alert

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The Independent Online

Intec Telecom Systems' shares plunged almost 30 per cent to 30.5p yesterday after the billing software specialist warned that profits this year will fall shy of City expectations.

US contracts worth $17m (£8.9m) have been moth-balled while two of Intec's clients talk about a merger, the Woking-based company said. They are now unlikely to be recognised in this year's accounts. Intec pared its forecasts for revenue this year to between £113m and £120m. Experts had expected sales of about £128m for 2006, some £12m more than in the previous year.

Will Wallis, an analyst at Numis Securities, said: "Clearly the delay in signing these new contracts had a substantial impact on the profits of this business. They have a lot of work to do regain credibility."

He, like other sector analysts, turned more cautious towards Intec's shares, no longer rating them a buy. Mr Wallis also trimmed his forecasts for Intec's earnings per share this year from 3.5p to just 1.5p.

Kevin Adams, Intec's chief executive, said: "We are doing our level best in a market that we have said is difficult to predict. For 20 quarters we have delivered or exceeded targets. This is the same management team."

Shares in Intec, which last week unveiled a deal to provide billing systems to Norwich Union for its "pay as you drive" insurance trial, have more than halved since February. In May, the company reassured investors that it expected to hit annual targets after profits in the first half of its year jumped 29 per cent before tax.

Telecoms companies are increasingly turning turning to Intec to develop sophisticated billing software. It bought Singl.eView last year, which helps manage that increasingly complicated customer billing.