Profits warning wipes £1.5bn off Sema's value

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Computer services group Sema saw £1.5bn wiped off its stock market value in early trading after it issued a profits warning.

Computer services group Sema saw £1.5bn wiped off its stock market value in early trading after it issued a profits warning.

The news impacted on the whole tech stocks sector, although buoyant old economy stocks kept the market's head above water.

The company warned it expected its second-half profits would be "clearly" below what had been anticipated by the market and by its management.

Sema said profits would be broadly in line with those in the same period last year, and said a "significant deterioration" in third quarter trading at its German subsidiary LHS was responsible for the static result.

A lower than expected performance in its outsourcing division would also affect the figures, Sema forecast, as revenues were expected to be some 10% lower than in the same period in 1999.

A statement from Sema said: "This is due to the postponement of contracts in continental Europe combined with the selective approach in the UK to win more profitable contracts."

The news sent Sema's shares into a tailspin, knocking more than 40 per cent off the shareprice in the first half-hour of trading, to fall 260p at 360p.

Sema bought LHS in March, but only completed the acquisition in July because of regulatory hold-ups.

The delay in completion "caused serious business disruption within LHS and delayed the integration", Sema said.

The firm remained confident about the outlook for 2001, where like-for-like revenue growth was expected to be in the region of 12 per cent.

Its systems integration business would show 12 per cent underlying growth in turnover in 2001 and its outsourcing business was expected to report turnover in line with this year, it added.

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