Time to cut your loss at IPT

The second profit warning in the space of a year was not the sort of Christmas present investors in email marketing specialist Interactive Prospect Targeting were hoping for. However, worse was to follow. Shortly before the year-end, the Financial Times reported that the profit warning threatened to scupper takeover talks that had been underway since August. In what appeared to be a well-informed article, the FT said Daily Mirror publisher Trinity Mirror had been granted exclusivity in the talks at the beginning of December but was now considering pulling out of the discussions.

IPT’s problems are, once again, centred on its UK business at which revenues are now set to fall short of expectations by about ten per cent. With high fixed overheads, IPT will now suffer a material shrinkage of margins – and therefore profits.

I tipped the shares here in January last year at 179p. They are now 99p. Without a bid they will go still lower – and it will take a while before management regains the City’s confidence. The safest course is to cut your losses. Sell.