Lorien warns IT slowdown will hit profits

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The Independent Online

The IT recruitment and services company Lorien warned yesterday it would miss profit forecasts for the current year as demand for IT workers remained subdued.

"Trading conditions have not improved in the first half of this financial year," Lorien said, adding profits for the current year would be "materially" below current forecasts due also to ongoing investment in new services. Shares in the company dropped 10p to close at 51.5p last night.

Analysts had been expecting Lorien to turn out a pre-tax profit of about £1.4m for the year to 30 November. They are now expecting a profit of closer to £1m.

Lorien, which provides both permanent and temporary IT workers to companies such as Glaxo and Unilever, has been hurt by slowing demand for IT-related work.

While life had not got any easier in the six months to 31 May, Lorien said it had maintained its investment in new services which meant it would incur start-up costs - particularly in the first half.

Despite the alert, the company was more upbeat on its prospects further out. "Lorien has certain encouraging and material prospects which the board hopes will crystallise in the second half of this financial year," it said.

Last year, Lorien made a pre-tax loss of £5.2m compared with a £2m profit the year before. Stripping out exceptional items to cover losses on a disposal, profits were £2.4m last year.