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Compel joined the plethora of IT companies issuing profit warnings yesterday. The UK company warned that results for the year ending June 2000 were expected to fall materially below forecasts. It blamed a worse than expected slowdown in customers buying IT. "As the year 2000 date change draws closer it is becoming increasingly apparent that the slowdown in expenditure in the corporate sector is more marked than originally envisaged," said Neville Davis, Compel chairman and chief executive. "In recent weeks an increasing number of customers have announced IT expenditure lockdowns, which are being rigorously and comprehensively implemented. In addition, it is now clear that many other customers are reducing IT expenditure and taking a very careful approach to their activities in the run up to the date change." However, Davis said this downturn in demand caused by Y2K was a "one-off and limited phenomenon", and remained upbeat about the future. "We expect a marked upturn in expenditure levels to begin during the first half of 2000 as organisations fulfil pent up demand. "Over the longer term, we anticipate growth in IT expenditure to continue as large organisations use IT not just to make themselves more efficient, but to transform their activities." ®

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