Shares in telecoms company Energis took a nosedive yesterday following a profits warning blamed on disappointing December trading.
A plunge of 30p to an all-time low of 23p wiped £530m off the company's market value. In a statement Energis said its turnover and profits before interest, tax, depreciation and amortisation in the year to March would not meet analyst expectations.
Sales for the year would be five per cent lower than the £1.01bn, with pre-tax profits down 10 per cent on the £155m forecast.
But the profits warning means that Energis may be at risk of breaching some of its loan agreements, and it will be discussing the implications of its revised expectations with its banks.
The company is blaming the profit slump on falling orders, a switch to lower margin products and a longer than expected lag in order payments.
The announcement comes just four months after Energis issued a statement to shareholders announcing that "performance continues to be resilient in the light of progressively more challenging market conditions".
According to reports in the Daily Express, chief executive David Wickham said that Energis had suffered because it did not offer the services customers wanted, while its financial information systems were not sophisticated enough to warn of the slowdown.
The company said it will cut costs by £30m and investment by £40m to "no more than £200m" in 2002-3.
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