A poor trading statement from China Eastsea Business Software has led to a forecast downgrade by Seymour Pierce.
The house broker has slashed its revenue estimates for the IT and business process outsourcing software and services provider from £16.4m to £9.3m in the year to February 2009. Net profit has been cut from £4.9m to £2.3m. Both revenues and profit forecasts are lower than the corresponding figures for 2007-08.
Several contracts did not come through in the first half as expected. China Eastsea blames slower growth at its customers which has meant that they have been less willing to spend on IT. The software company also says that the Olympics distracted the Chinese from completing deals.
China Eastsea shares fell 5.5p to 17.75p each, which values the company at £12.8m.
The second half is expected to be much better than the first half. However, these potential contracts are still being negotiated.
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