Psion shares have slumped 16% after a profits warning from the mobile computing business.
The company, which has entered the rugged handheld computer market with its EP10 product, said its full year performance would be below expectations, due to a shortfall in the first half. It blamed supply chain problems relating to one of its products - now resolved - and exchange rate weakness, as well as development and launch costs for the EP10. So it expects a first half loss of £4m and revenue growth for the full year of between 5% and 8%. The company's shares are down 14.63p at 75p. Peter McNally at Charles Stanley said:
With an expected loss in the first half of approximately £4m, the company will need to make a profit of over £13.5m in the second half to meet consensus estimate. Although initial sales of the EP10 are looking healthy with approximately 9000 units sold already, and are 16% ahead of last year on a constant currency basis, we believe the profit gap created in the first half will be too large for the company to bridge in the second half unless exceptional sales are made without any production slip ups.
Ian Robertson at Seymour Pierce said:
The long term story remains intact but we see no catalysts in the short term - we move from buy to hold.
