Delays trigger profit warning at technology company

TECHNOLOGY group Servelec is warning that full year expectations may be too high following “further slippage of contracts.”

Servelec said that its healthcare, technologies, and oil and gas divisions were being affected by “market headwinds”.

A statement from the Sheffield-based business said: “We had anticipated a heavier weighting towards the second half of the financial year than has historically been the case, but it is now clear, given further slippage in contracts, that there is likely to be a shortfall in our expectations for FY16 as a whole. “

However despite a bleaker outlook than expected, Servelec has been successful on the acquisition trail already this year, acquiring “market leading” Target eSolutions as well as a £20.3m edtech business, Synergy earlier this year.

Alan Stubbs, chief executive officer of Servelec said: “I am disappointed to have to report the difficult trading conditions that have impacted our outlook for FY16.

“We don’t believe that this reflects upon the quality or scale of the opportunities across our target end markets. However, some end markets are currently challenging and timing of order entry has become a short term issue.

“As such the management has adjusted our outlook and have taken swift and prudent action to reallocate the resources of the Group and reduce costs.”