Kewill Systems blames tough times in IT for failure to hit break-even

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The Independent Online

Kewill systems saw almost £6m wiped off its value yesterday after the Surrey-based software company said it would no longer break even in the second half of its financial year.

The stock, down 30 per cent at one stage yesterday, finally closed down 7p at 27p, a fall of 21 per cent, after the company said tough market conditions had continued to take their toll. Andy Roberts, Kewill's chairman, said: "Although the board is confident of Kewill's product offering and strategic potential, conditions in the IT market remain extremely tough."

In November, when Kewill published its half-year results, it predicted it would break even at the operating level in the second half of its financial year.

Yesterday, it said revenues for the third quarter to the end of December had been below expectations. While it thought sales would pick up in the current and final quarter, it said it was "unlikely" the improvement would be enough to get it to a break-even position.

The company said sales of its electronic commerce software had been hit particularly hard in the US, where orders slumped 30 per cent in the third quarter from the second quarter.

While the company said it was difficult to forecast its year to 31 March results accurately, given the tough economic climate, it said its second-half operating loss would be "significantly" less than the £4.9m operating loss reported in the first half.

It expects to have about £8.5m of cash at the end of March, compared with the £11.5m it had at the end of the half-year.