Shares in Anglo/French IT services company Sema Group lost almost half their value today in the wake of a profit warning.
Sema admitted that its year-end financial results would "clearly be below those anticipated" and blamed "a significant deterioration in [recently acquired LHS Group] performance in the third quarter", and a "lower than expected performance in outsourcing".
The news was enough to slash its share price by 40 per cent to 368p in early trading, and heightened fears that the technology tumble is far from over.
Sema bought the German/American LHS Group earlier this year for $4.7bn, but the completion of the sale was delayed for regulatory reasons. The company said that the time lag "caused serious business disruption within LHS".
Revenue for the second half of the year is expected to be some 10 per cent lower than in the same period in 1999. Sema said this was "due to the postponement of contracts in continental Europe combined with the selective approach in the UK to win more profitable contracts".
Anthony Miller, an analyst at the Richard Holway group, said: "Sema is talking specifics when the problem is more pervasive. Over the last several months everyone has been suffering. It is part of the general malaise in the technology sector. There is a lack of uptake of new ebusiness applications and legacy work has dried up because of Y2K."
Sema's outlook for 2001 is sunnier, however. It predicts revenue growth of 12 per cent as the Group focuses on the faster growing segments of the IT market.
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