Morse slips to new year low on flat sales

Morse slips to new year low on flat sales

Shares in UK IT services group Morse have slipped 15% to a new year low of 93 pence after the company warned of continued tough trading conditions in the IT reseller segment.

The vendor, which is seeking to reposition its business away from low-margin commodity hardware sales to a focus on services business, is reporting flat year on year revenues of $93 million for the third quarter ending 31 March 2005.

Morse says trading conditions remain tough for IT sales in the UK, with the trend pointing to further deterioration and margin pressure.

Duncan McIntyre, chief executive of Morse, says the services side of the business now represents 45% of sales. He says the firm is looking to accelerate its change programme with the aim of achieving 70% of profits from services.

This will mean further restructuring of unprofitable business lines, he adds, with further details forthcoming at the end of the fourth quarter.

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