The traffic information provider Trafficmaster lost its way yesterday, shedding more than a third of its value after warning it was likely to post a loss this year.
The company, which uses wireless technology to gather data from roadside sensors and deliver traffic updates over car audios, said sales had grown more slowly than expected, due partly to delays in building its European sales force.
"It is likely that losses in the first half will continue into the second half, resulting in an overall loss for the financial year, although we expect the company to be cash generative before the end of the year," Trafficmaster said in a statement.
Shares in the company, which covers more than 8,000 miles of roadway in England, Scotland and Wales, dropped 37 per cent to a new low for the year of 108p.
Trafficmaster's chief executive, David Martell, said the expected loss for the second half of this year was smaller than for the first and that the company would return to profit in the first six months of 2002.
But Barney Gray, an analyst at Beeson Gregory, was sceptical. "It always seems to be jam tomorrow with this company ... We're still waiting for them to prove their business model."
With shares at their current level, Mr Gray added, "one of the giant technology companies might look at it" for a possible acquisition. But they might say to themselves, "why buy it now if you can get it cheaper later".
Mr Martell said the company would not take any special action to boost its share price.
In 2000, Trafficmaster made a pre-tax profit of £435,000. Over the past year the company has attempted to expand from a predominantly UK business into a global player, and has recently invested in setting up new operations in France, Italy and Benelux countries.Reuse content