IT solutions specialist Chelford blames cost overruns and new contract delays for a 60 per cent profits drop to £550,000.

Basingstoke-based Chelford increased turnover 29 per cent to £18.6 million in 2006, but pre-tax profits fell from £1.4 million to £547,000 and earnings dropped from 17.12p to 9.83p a share. Chairman William Birkett said these results reflect a ‘cost overrun on a fixed price contract’ and ‘certain customers delaying the signing and implementation of new contracts’. It is to be hoped that no such dilatoriness will be displayed by the new customers signed up by AIM-quoted Chelford last year, which include Isle of Man Creameries, Wrights Pies, Suzuki and Almac Sciences.

The company increased year-end net cash from £870,000 to £1.45 million in 2006. Birkett sounded an optimistic note for the current year, citing an ‘encouraging’ level of orders in the first quarter, 'strengthened management and tighter controls'.

He declared the Chelford board is ‘confident of the prospects’ for 2007 and anticipates ‘a satisfactory outcome for the full year’. At 161.5p, valuing the company at £11.7 million, the shares are 18p up today, though little more than half their 301.5p peak of March last year, and are a recovery speculation.