Deputy City Editor
Shares in Proudfoot, the US-based but London-quoted management consultancy, lost a fifth of their value yesterday, tumbling 12p to 48p after the company warned that first half profits would be "significantly lower" than last year.
Proudfoot, which seemed to defy the recession in the early 1990s before shocking the market with a series of gloomy trading statements, told yesterday's annual meeting that full-year profits were also unlikely to match last year's pounds 11.2m.
The profits warning came as Lord Stevens, United Newspapers' chairman, retired from his pounds 300,000-a-year job as chairman of Proudfoot.
He leaves after an eight-year tenure at the company, which reversed into a London-quoted shell in the mid-1980s and was for some years one of the best performing stocks on the market.
Proudfoot's problems are have been caused by lower than expected billings in its important American business. The devaluation of the peso has also greatly reduced returns from Mexico.
Malcolm Hughes, the chief executive, said that non-US operations were performing well with higher billings in Germany and Japan.
Last month Proudfoot announced a swing into the black after losses of pounds 11.3m in 1993 despite the first signs of a fall off in trading. Mr Hughes blamed the downturn on the distraction of a failed attempt by management to buy out the company's European and South African businesses.
Mr Hughes, who masterminded Ladbroke's unsuccessful bid for the National Lottery and admits to not being a great fan of management consultants, said he hoped this would be his first and last profits warning at Proudfoot.
He has a reputation as a hatchet man, having restructured the Chloride battery business and cut jobs at Vernons, the pools company.
Proudfoot, with more than 700 staff worldwide and pounds 100m-plus a year of turnover, is capable of being turned around, Mr Hughes believes.
The market has shunned Proudfoot since 1992 when sharp falls in profits and management changes sent the shares plunging from a high of 384p to a low of 67p.