Bid action keeps Morse afloat as second half wanes
09 July 2009 | 2323 views | 0
Shares in Morse have held steady on the back of potential bid action, as the UK IT services group reports a dip in second half revenue in an unaudited trading update for the 12 months ended 30 June 2009.
On Wednesday, Morse confirmed that it had received a preliminary approach of 25 pence per share from an un-named suitor. Shares in the vendor jumped 50% on the news and opened this morning at the 25 pence offer price.
By mid-afternoon Thursday, the share price had slipped four per cent to 23.75 pence, as the company posted a brief update on its second half performance. While revenues looked to underperform the first half, the group says that cost reduction measures and the resolution of some troublesome SAP projects had brought some stability. The group has also moved from a net debt position at year end 2008, to a net cash position of £12 million.
In February, Morse offloaded its Investment Management Consulting business and restructured its operations after reporting a group-wide operating loss of £17.3 million for the six months ended 31 December 2008.
Mike Phillips, Morse CEO comments: "We knew that this would be a difficult year for the group, but the board is pleased with the considerable progress that has been made. With the significant restructuring and change programme near completion, we have established Morse today as a niche provider of IT services and technology."
He offered no further news on Wednesday's bid approach, which has been dismissed by the board as undervaluing the company.