AIM suspends European Telecom shares over rule breach

Shares in European Telecom, a distributor of mobile phone equipment, were suspended from trading on the Alternative Investment Market yesterday after the company breached stockmarket rules.

The group, which also unveiled plans to buy a mobile phone distributor, failed to publish its half-year results within the required timeframe. The delay, which breached AIM rule 16, led to its shares being suspended at 8p each. AIM-listed companies must publish their financial results within three months of the end of the period they cover.

European Telecom said it now expected to announce its figures for the six months to 30 September "later this month". A spokesman denied there was any cause for alarm, putting the delay down to the company having undergone an exceptionally busy few months involving a restructuring and a fund raising as well as getting its latest acquisition signed off.

European Telecom also said it was buying Philips's French GSM handset configuration and distribution business for €500,000 (£304,000). It said it would publish further details "as soon as practicable".

Shares in the company, which hit a high of around 640p during the internet boom in 2000, have since collapsed after difficult trading. In the year ended 31 March, it reported a pre-tax loss of £27.3m compared with a £3.7m profit the year before. Last October, European Telecom raised £2.2m net of expenses through an underwritten placing and open offer of shares and also announced the sale of assets.

The company had already carried out a radical restructuring which saw it make heavy redundancies among its UK workforce and had started a strategic review.