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Psion shares drop 16pc after first-half loss warning on currency and supply issues
Shares in Psion, one of the early wunderkinds of the technology industry, tumbled nearly 16pc to 74p this morning after it warned it will make a loss in the first half of 2011 because of supply chain issues and a weak pound.
The British company, which began making smartphones around 20 years before they became fashionable and now produces rugged computers for the likes of Volkswagen and BMW, said revenues for the six months to June were 4pc down on the same period last year. It downgraded its forecasts for full-year revenue growth from 10pc to between 5pc and 8pc.
“The impact of these factors together with the development and launch expenses for the new EP10 product [its new enterprise PDA device] will result in Psion reporting a loss in the half of about £4m, compared with a profit of £700,000 a year ago," Psion said in a statement.
However, Psion said the disappointing performance in the first half would be mitigated in the second by a strong order book. It said orders of its computers were 16pc ahead of last year on a constant currency basis and that the supply chain issues, which affected one touch-screen product, had now been resolved.
Psion shares, which have gained nearly a quarter of their value over the past year, closed at 89.625p, valuing the company at about £125m, but had fallen to 74p by the time of publication.
Analyst Ian Roberston at Seymour Pierce said the warning was “disappointing” and moved his recommendation from "buy" to "hold".
He was more moderate about the company's long-term prospects, however. “The product supply issues have now been resolved. Progress with the EP10 and CDMA devices, which is key to the longer-term investment story, is still encouraging. The long-term story remains intact but we see no catalysts in the short term," he said.