Sherwood Computer hit by turmoil at Lloyd's

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The Independent Online
TURMOIL IN the Lloyd's insurance market hurt Sherwood Computer Services, the USM-listed software specialist. Pre-tax profits fell from pounds 1.7m to pounds 541,000 in the first half of the year, in line with market expectations following a profits warning at the beginning of this month, writes John Murray.

The warning wiped out a third of Sherwood's stock market value. The shares rose just a penny to 145p yesterday, despite assurances from the company that the second half would be better than the first.

Richard Guy, executive chairman, said that Sherwood was making progress again after the problems in the first six months. 'What hit us in the first half was the fact that we had no licence sales to Lloyd's. The reorganisation of Sturge and the closing of a number of syndicates left the market very uncertain. People have delayed decisions on new systems, but we are beginning to see that business return as Lloyd's is restructured.'

Lloyd's, where Sherwood is market leader in the provision of computer services, traditionally accounts for about 40 per cent of the company's turnover.

The group also suffered from a decline in orders from its local authority and housing association customers. Mr Guy said the local government reorganisation and the introduction of the council tax had made progress difficult in that market.

The interim dividend is maintained at 1.75p on earnings per share of 3.4p (16.7p). Mr Guy said the decision reflected the company's confidence for the second half.