Compel share price halves
Profit warning sends stock tumbling by half
Reseller group Compel saw its share price fall by nearly half yesterday thanks to a profit warning that looks like it will turn an expected 4 million profit into a 4 million loss.
According to today's Financial Times (FT), Compel's shares were the worst performing on the London Stock Exchange yesterday, dropping by 183p to 195.5p.
The fall values Compel at 61 million, prompting speculation that the group could now become a take-over target.
Compel has blamed a slow post-Y2K pick up in the first half of the year for its poor performance, which it said would mean year end results would "fall materially short" of expectations. Compel's year ends in June.
For the first six months of the year - ended December 31 1999 - Compel recorded pre-tax profit of 3 million on sales of 135 million.
The FT said there had been speculation among analysts that all was not well within Compel, and quoted one as saying: "For things to have turned round so quickly is astonishing. Something must have gone seriously wrong inside the company."
But back in February, Compel's interim profits slipped by 40 per cent, prompting the company to site a slowdown in sales. This was in spite of a 12 per cent increase in sales during the period. So perhaps no one should have been too surprised to find a problem as Compel approaches it year end.
Compel also lost Mark Howling, MD of its reseller and services company CompelSource. ®