Marlborough shares dive 56% on warning

Shares in Marlborough Stirling more than halved yesterday after the software company warned it would miss profit expectations for the year due to tough market conditions and delays in implementing technology for one of its customers.

The company, which employs about 1,500 staff, said it was now embarking on a restructuring that would cost it £2.5m but save it £6m a year. About 10 per cent of the workforce could be facing the axe.

Shares in Marlborough Stirling plummeted 56 per cent, or 29.5p, to close at 23p after it warned sales for the year were now expected to be at least £125m, some 7 per cent beneath market forecasts, while warning 2003 also looked challenging.

Graham Coxell, the chief executive, said: "Whilst the fundamentals of the business remain strong, it is clearly disappointing to have to report that we will not meet previous expectations of our financial performance for both 2002 and 2003."

Furthermore, the company said the benefits of its cost-cutting programme, in response to the tougher trading conditions, were not expected to start flowing through until 2003.

Marlborough Stirling also said yesterday that its results for the six months to 30 June, which it publishes next Thursday, would show an operating profit and sales of at least £8m and £60m respectively.

Analysts at UBS Warburg, the company's broker, had been predicting a £10m profit on sales of £62m at the half-year stage and had been looking for sales of about £133m for the whole year.