AIT suffers cashflow crisis as profits warning stuns City
31 May 2002 | 3711 views | 0
AIT Group, a UK-based supplier of customer relationship management systems for banks, has suffered its biggest ever one-day decline in stock market value after warning of a surprise £1.1 million shortfall in revenue for the year ended 31 March due to an unexpected contract delay.
By mid-morning the company's stock had tumbled as much as 73 percent to 132p, its lowest for four and a half years, after reversing an earlier statement that it would meet analysts' forecasts for revenue and pretax profit for the year.
"This expectation was based on contract revenue which the AIT Board had reasonably expected to be committed at that time. However, a contract has not yet been confirmed so the earlier statement that results were in line with market expectations is no longer accurate," says the company in a statement.
The shortfall has prompted worries over the company's cashflow, as short term cash requirements overshoot available credit lines. The company says that current net bank debt is approximately £10.5m as at the end of May, greater than originally anticipated.
Four AIT directors have dipped into their own pockets to make a £700,000 loan to the company to meet its short-term payment obligations.
In a statement, AIT says: "The company is actively exploring the options available to it for improving its balance sheet position and an announcement will be made in due course."
In the last year, AIT has invested in excess of £23 million to develop a next generation platform, including the acquisition and integration of CRM vendor IMA.