Kode points to profit below expectations

KODE International, the computer group, has issued a profits warning for the year to 31 December. Stephen Day, chief executive, said profits would be higher than last year's pounds 1.03m before tax but below market expectations, writes Diane Coyle.

The reason for the caution is stiffer competition in the computer servicing business, which accounts for about a third of Kode's pounds 21m turnover through its DCM Services subsidiary. Computer firms such as Apple, DEC and ICL have been entering this market themselves, squeezing margins.

The company's other two businesses, both making printed circuit boards, continue to perform well, according to Mr Day. One of them is a joint venture company in China. Tom Eliot, an analyst at the brokers Greig Middleton, said: 'It is a very exciting business and it is where most of the future growth will come from.'

Kode has held its dividend, which will be 6.0p per share. The share price closed down 4p at 138p.