London Bridge Software, specialists in making debt collection programmes for banks, saw its shares plunge 18 per cent yesterday after it warned it would make a £52.6m loss this year and said business would remain challenging in 2003.
The shares fell 5p to 23.5p after it announced it would write down £43.5m from goodwill on previous acquisitions as depressed market conditions have forced it to revise down the amount of cash it expects to generate from the assets.
London Bridge also said it was making a further asset write-down of £3.5m and would incur exceptional costs of £6.1m in the year to 31 December. These include costs related to a wave of redundancies made earlier this year that saw the company's headcount fall by 10 per cent to 690 and involved the closure of five offices.
Gordon Crawford, the chairman of London Bridge, said: "It has been the most difficult year in the country's history. During the period we have had to adjust our cost base and our sales process to reflect the way in which customers wish to engage."
London Bridge, which also provides software to set up new bank accounts or take out credit cards online, added that the prospects for 2003 looked tough. "Market conditions have remained difficult throughout the second half of 2002 and sales cycles have continued to be extended as customers defer purchasing decisions. We believe [trade conditions] will continue to be challenging during 2003."
London Bridge has suffered despite the fact that banks are enjoying a healthy flow of customers taking up new credit cards and opening accounts. This is because many banks are relying on their own systems to service customers rather than paying for technology from specialists such as London Bridge.
The company has £20m in the bank, and is cash generative.