NSB Retail, the software company that counts the world's biggest gaming group Harrah's among its customers, blamed a profit warning yesterday on its failure to secure some key contracts before the end of its financial year.
Shares in the company sank 7.5 per cent to 30p after it warned profits would miss market forecasts because of the delays.
To try to shore up confidence in its prospects, the group said it hoped to sign the delayed contracts during 2007. It had hoped to sign a number of new customers last December, which is a key month for its business. It gave no reasons for the delays.
Analysts at Dresdner Kleinwort drew comfort from the fact that NSB did not blame its woes on the slowing US economy. "The cause of the deal slippage appears to be customer internal issues, and there was no reference to a slowing US retail environment. NSB's pipeline continues to build strength, and we remain positive on the market," they wrote in a research note.
NSB said it expected to report an operating profit for the year to end-December of $18.1m (£9.2m), against analysts' expectations of around $24m. It said adverse currency movements had knocked $2.5m off its profits given that the bulk of its costs are in Canadian dollars, which strengthened against the US dollar last year.
It struck a confident tone for the year ahead. "The pipeline for 2007 business is robust and the services order book is higher than at the same time last year," it said.
Dresdner kept its operating profit forecast for 2007 unchanged at $22.5m and its pre-tax profit forecast steady at $22.8m.
NSB said it had signed a number of significant contracts last year, including deals with Barnes & Noble, the US book chain; MGM, the gaming giant; and Quicksilver, the surfwear manufacturer.
Elsewhere, the marketing services group Mice also blamed contract delays for a profit warning that knocked 25 per cent off its share price. Its stock closed down 7.75p at 22.75p. The problems mainly affected its US arm. It also said it was in talks to sell some of its leisure assets and that it would explore other options to reduce its debt.Reuse content