Retail Decision shares slump 18% as it warns on card fraud revenues

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Retail decisions, the company that helps retailers protect themselves against credit card fraud, admitted yesterday that difficult trading conditions were making it hard to predict revenue streams.

The company said it had seen "thinner" levels of e-commerce activity than expected but remained confident demand would increase in the medium and long term. The comments knocked the share price 19 per cent to 29p despite the group announcing that it had narrowed pre-tax losses in the first half.

Carl Clump, the chief executive, said he was surprised at the drop as Retail Decisions has performed well despite a "gloomy" economic background. "Fraud does not go away," he said. "I feel confident about what we are doing and what we have done. What may throw us off course is a worsening economy but I think the economy will stay much the same in the US and the UK."

An analyst, who asked not to be named, said he is considering downgrading his full-year forecast but said the shares had fallen more than expected, possibly due to inertia. "It is a tough environment out there," he said. "But the figures are in line with expectations."

Retail Decisions narrowed its pre-tax loss from £1.67m in 2000 to £548,000 for the six months to 30 June 2001, aided by a £299,000 National Insurance credit on share options, on turnover up 49 per cent to £10.7m. Its in-house broker Granville Baird predicts a full- year, pre-tax loss of £870,000.

During the six months revenues from the US and UK were broadly similar to last year but the company continued to expand its international presence. Operations in Australia and South Africa, which were not part of the group during the first half of 2000, contributed £2.2m to turnover.