Alterian shares have started to recover even though it has revealed profits have been wiped out and it will just break even in the financial year ended March 31 2011.
The company has already seen more than £60m wiped off its value after issuing two profit warnings within ten days and chief executive David Eldridge step down. At midday today (Monday) its share price had risen 13.47 per cent to 109.5.
Alterian has forecast revenue for the year to be about £37m. It also expects to make a one-off write-off of between £2m and £2.5m, including provisions covering investments and future liabilities, in relation to a facility closed during the year.
The company supplies software to multinational brand owners and government departments including Pfizer, Vodafone, HSBC, Bank of America and Dell, but the failure to re-sign a significant contract has triggered the shares crash.
The crisis started on April 4 when it said that annual revenues would be 10 per cent below market expectations of £42m-£44m , the majority of which would come out of profits.
Then last week, Alterian said it had further reviewed its financial position and turnover would now “be materially lower than that implied by the announcement of April 4”.
A company statement said: “The expected further shortfall arises from both revenue and routine operating costs in comparison with market expectations.”
It has now noted that the market expectations for the year to March 31, 2012, were in the range of about £40m to £43m pounds for revenue.
The company said that the lower to middle of the range of market expectations for revenue was in line with its own expectations.
Alterian has also started the search for a replacement for Eldridge. In a statement it said: “The board has appointed the executive search firm Russell Reynolds to assist with the recruitment of a new chief executive. Following that appointment the board anticipates that the new chief executive will, with the executive management team, review operational processes and strategic issues and make appropriate recommendations to the board.”
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