The group also cited the further weakening of the German mark, in which the group invoices 40 per cent of its sales, as hitting margins. Analysts sliced around a quarter from their profit forecasts for the current year following the warning. It comes just days after Logica, another British computer services group, saw its shares dive and analysts trim their forecasts in the wake of its announcement that it would be hit by the strong pound and difficulties in recruiting extra staff.
Launching the Series 5 yesterday, David Potter, chairman, said there had been a slowdown in Series 3 sales in May and June as distributors anticipated the arrival of the new product, while the cheaper Siena had also been disappointing.
"In these circumstances, the performance of the group will be affected until the Series 5 becomes established in its markets. However, with encouraging orders for the Series 5, we look forward with confidence."
Marina Wyatt, who took over as finance director in October, said the market had overreacted. The share price, which has been run up from 400p at the end of April to a recent peak of 509p, had started to move after the group announced a big licensing deal for its new EPOC32 operating system at the beginning of May and press leaks about the Series 5.
She said yesterday's statement was consistent with what the company had been saying all through the year. The only new factor was sales, which had been "well ahead" of the previous year but slowed down "fairly significantly" in May and June. "I would say, however, that sales are still well ahead of the previous year," she added.
While the new 32-bit Series 5 was well received by analysts, they cut their profit forecasts for the current year to December from as high as pounds 24m to as low as pounds 16.5m, which would only be just ahead of last year's pounds 16m. Keith Woolcock of Merrill Lynch said a speculative bubble had built up in the share price, but he cautioned that Psion had stumbled in previous years when it launched new products.