Comino shares fall 41% on half-year profit warning

The software company Comino warned yesterday it would plunge into the red at the half-year stage and said full-year profits would be "significantly" lower than last year's £3.2m. Shares in company, which is based in Buckinghamshire, slumped 41 per cent to 111.5p, wiping £15m off the company's market value. At the peak of the internet bubble last year, the stock had traded as high as 821.5p.

The software company Comino warned yesterday it would plunge into the red at the half-year stage and said full-year profits would be "significantly" lower than last year's £3.2m. Shares in company, which is based in Buckinghamshire, slumped 41 per cent to 111.5p, wiping £15m off the company's market value. At the peak of the internet bubble last year, the stock had traded as high as 821.5p.

The company blamed the shortfall on a reduction in the number of local authority contract wins, saying they had simply been slower to award new contracts.

However, Comino said it thought those contracts had not been lost to competitors and that continuing negotiations would still result in "significant" new business being won.

Comino, which provides software to local government as well as the occupational pensions and social housing markets, also blamed the shortfall in profits on increased spending on developing products for the occupational pensions market.

The early completion of those products would significantly enhance its product range in a sector that it expected to grow substantially, it said.

"Comino is experiencing improved performance in its second quarter, but this will be insufficient to prevent a loss at the half year," the company reported. "The board anticipates stronger performance in the second half of the year based on its order book and prospects and expects to make a profit for the year as a whole."

Profits, however, would be significantly reduced compared with those achieved in the year ended 31 March, it added.

Nevertheless, it believed factors such as the strength of its customer base and the level of its recurring income stood it in good stead for future growth. It plans to release half-year results toward the end of November.