Promethean shares plunge as schools budgets are cut back
Saturday 04 December 2010
The classroom technology group Promethean World has discovered the downside of a public listing in its first year after a profits warning sent shares crashing over 30 per cent.
It has been a troubling debut year for the interactive whiteboard maker, which listed on the London Stock Exchange at 198p a share in March. The shares have tumbled since. It closed yesterday at 52p, over 70 per cent lower than its listing price. Jon Fletcher, an analyst at Altium, said the group's listing had been overpriced, "which has been shown up by the lack of budget visibility and the issues in the US".
Promethean had warned investors in October that market conditions were tough as clients cut their budgets. The group said yesterday it had seen a "deepening of these uncertainties and constraints" in budgets, particularly in the US. It said: "This has reduced near-term visibility." December remains an important trading month for the group but it predicted revenues in the final three months of the year would be lower than a year earlier and "therefore full year results will be below market expectations".
Promethean said the fall in orders was down to customers deferring rather than pulling their spending altogether and the issue affected the whole industry. It added that in response it would cut costs which would include job losses.
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