Recognition dives 67% after US downturn

Shares in Recognition Systems, the Birmingham-based software company, plunged 67 per cent yesterday after the company warned that revenue in 2001 would be "significantly below current market expectations" as a result of the slowdown in the US

Shares in Recognition Systems, the Birmingham-based software company, plunged 67 per cent yesterday after the company warned that revenue in 2001 would be "significantly below current market expectations" as a result of the slowdown in the US.

The company, which develops and sells "customer relationship management" software, said that losses for the year ended 30 September would be higher than expected. Its shares closed at 37.5p, their lowest point in around a year and a half.

In a trading statement issued to the Stock Exchange yesterday, the company said: "In common with other companies with a significant US presence, Recognition Systems has witnessed the dramatic downturn in the US economy. As a result Recognition Systems is experiencing delays in the sales to major clients of its Protagona software and associated services and maintenance."

Recognition, which gains around two-thirds of turnover from the US, also said the economic downturn there had adversely affected some of its key partners including Acxiom Corporation. The slowing in the US was, in turn, delaying sales through Acxiom.

Analysts yesterday slashed their forecasts for Recognition's 2001 turnover from around £20m to about £13m. They are now looking for a pre-tax loss of around £0.5m having previously forecast a profit in the region of £0.5m.

Recognition forecast yesterday that revenue for the six months to 31 March would be "broadly in line" with market expectations at £6.5m.