Sherwood shares crash on second warning

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The Independent Online
SHARES in Sherwood Computer Services fell 60p to 85p yesterday, dipping to a three- year low and 75 per cent below the 342p peak hit in March, after a second profits warning in three months.

The first warning in August saw the price tumble 63p to 145p.

Besides yesterday's warning that profits this year would fall short of the most pessimistic of analysts' forecasts of pounds 1.5m, investment confidence was also knocked by the resignation of Charles Taylor, finance director.

George Matthews, chief executive, denied, however, that Mr Taylor's departure was linked to the company's problems. 'He was going anyway. I don't know where he is going, except that it is somewhere else in information technology,' Mr Matthews said.

Sherwood's difficulties, he added, stemmed from 'two key areas' - failure to win software contracts for local government offices and less work for the Lloyd's insurance market.

The Lloyd's business has had to be restructured, and the first wave of redundancies among the subsidiary's 140 staff took place yesterday. Sherwood declined to specify the numbers of jobs being lost, but said that more will go soon.

Second-half profits have also been dented by the loss of a one-off pounds 500,000 licence fee from an important client. The client is extending its commitment to the company's bureau service, but the financial benefits will not be felt until next year.