Surprise profit warning sends MDIS skidding

MDIS - the former McDonnell Information Systems - threatened yesterday to return to its former accident-prone form after a surprise profits warning sent its shares skidding 12 per cent before they recovered to close 3.5p lower at 42p.

The software group, which has returned to both profitability and the dividend list under the former IBM executive John Klein, blamed unexpected losses at Glovia, its joint venture with Fujitsu of Japan. Glovia has been hit by the slump in demand for business planning software.

The group also announced plans to enter into a complex sale-and-leaseback agreement which will cut the rental costs of its headquarters by pounds 2m a year, but which will require a one-off exceptional write-off of pounds 2m against last-year accounts.

Following yesterday's statement, Collins Stewart, the house broker, cut its profits forecast before tax and exceptionals from pounds 7m to pounds 2.7m, although windfall gains from a settlement with the Inland Revenue could take that up to pounds 8m in headline terms.

The group is also planning to make up the shortfall by recognising pounds 4m of the exceptional gain from the joint venture with Fujitsu announced in June 1997.

The MDIS board said that the public and corporate sectors and human resources systems, both problem areas in the past, had increased their order intake by 25 per cent .

Similar problems, which are a result of the collapse in Asian markets, have also hit Glovia's larger rivals such SAP and Baan, both of which have experienced a dramatic fall from grace over recent months.

John Morely at Collins Stewart said that the shortfall was disappointing, but he insisted that there were good reasons to believe this was a temporary setback. The 40 per cent growth in revenue at Glovia contrasts favourably with the 15 per cent rise SAP, the market leader, could muster in the current climate, he said.

"It is not too bad a message. This company has come from huge losses to profit and back on to the dividend list. They are doing a good job. I wish there were not this shortfall this year, but the positives are good," he said.

MDIS has yet to live down the poor reputation it gained in the City when it plunged from a high of 234p shortly after flotation in 1994 after a spate of profits warnings.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

Ashdown Group: Marketing Executive - 6 month FTC - Central London

£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

Ashdown Group: Junior Project Manager (website, web application) - Agile

£215 per day: Ashdown Group: Junior Project Manager (website, web application ...

Guru Careers: Software Engineer / Software Developer

£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'