Reflec also announced a management shake-up, after a dreadful share price performance angered institutional shareholders. Harold Morley is stepping down as non-executive chairman, to be replaced by Alan Edwards, a partner with accountants Neville Russell. Peter White, Reflec's managing director, has been promoted to chief executive. However, despite Reflec's problems, Peter White was unavailable to answer mounting concerns about the group's future yesterday, having flown to America for his Christmas holidays.
The new board has also appointed accountants Arthur Anderson to assess its financial plight and determine whether it needs to raise more funds.
Floated in April 1996 at 40p, Reflec's shares rose to more than 130p earlier this year before its dramatic fall from grace.
Adam Hart, of Peel Hunt, the company's brokers and sponsors of the flotation, said: "This is a disappointment. Small companies are high risk and until products produce profits they always remain so."
Reflec's flotation document forecast the group making an operating profit in the year to February 1998 but Mr Hart admitted it would not meet this target and refused to predict when it would break into the black.
- Andrew Yates