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Action suspends shares – again

Statement expected soon from mail order giant

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Action Computer Supplies has temporarily suspended its share trading pending an announcement. The mail order PC company made the statement to the stock exchange at 12:15pm today. No explanation was given regarding the forthcoming announcement. A representative of the Middlesex-based company was unable to say when further details would be available. Action's shares have plunged around 50 per cent from their July high when prices topped £3. Its shares were today suspended at 177.5 pence. The company is in a closed period until 21 October when its results for the year ended 31 August are expected to be announced. CSL analyst Clive Longbottom said: "Judging by the share price, it's probably going to be negative rather than positive news. "Action is pretty much on its own in the mail order market, but is getting nibbled at by the office supplies companies selling PCs. "Action aims at the SMB market and is likely to get hit by Y2K. Also, SMBs tend not to be buying networks from Action, but increasingly from places like PC World," he said. "The Action model is getting very weak." Action has been moving more towards being a Web-based company. There were several redundancies this summer during a re-jig towards online sales. "Insight already has the Web model in the US. But it bought Action for its mail order business," said Longbottom. The last time Action suspended its shares was in July, when it announced a revision to the proposed take-over by US giant Insight Enterprises. This took the deal from 0.16 per cent to 0.12 per cent of an Insight share for every Action share. At the time, the move was said to be due to a "material adverse change" in Action's trading conditions, and put a lower value of around £93 million on the company. ®

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