Marconi shares fall 29% after forecast warnings

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The Independent Online

The troubled telecoms company Marconi yesterday warned the terrorist attacks in the US had "increased the general uncertainty" in its markets and may result in it failing to meet its first-half forecasts. Shares in the company plunged 28.8 per cent to a 30-year low of 13p.

The company said there could be "no assurance" that the restructuring actions it announced on 4 September would be sufficient to offset the decline in sales. Nor could it provide assurance that it would be able to achieve its forecasts for the six months to 30 September.

Marconi made the statement in a report filed to the US Securities and Exchange Commission. The filing has to be made annually to satisfy US stock market regulations.

The company played the report down, saying it had been "misinterpreted" as it was obliged, under US rules, to outline all potential risks to the business and had chosen to be "very prudent". A spokesman said the group did not know what impact, if any, the US atrocities might inflict on its business.

However, the statement was the first Marconi had made since its 4 September update and gave some investors further cause for panic. Only last week, analysts at Dresdner Kleinwort Wasserstein warned that Marconi was unlikely to survive unless a rescue package was put together or it was taken over.

Marconi, which is due to release a trading update on 15 October, will publish its results for the six months ended 30 September on 13 November.

Earlier this month, the company ousted its chairman, Sir Roger Hurn, and chief executive, Lord Simpson, as it warned it was heading for a £5bn loss this year.

That profit warning accompanied news of a further 2,000 redundancies, bringing the total this year to 10,000, as Marconi said it expected a first-half operating loss of about £227m rather than its previous guidance of break even. Its debt, at the end of August, totalled £4.4bn.