Restructured IT services provider Netstore is talking to possible bidders after losing a first-half £266,000 pre-tax.

The Reading-based company, which lost £198,000 in the year to last June on £37 million turnover, made an operating profit of £1.2 million in the six months to December on turnover down £360,000 at £19.7 million. However, restructuring costs and other exceptional items of £1.3 million and £201,000 finance costs took the company into the red.

AIM-quoted Netstore has a new chief executive officer, Graham Kingsmill, and chief finance officer, David Memory, who last month initiated a strategic review of the company’s activities. This has led to ‘early-stage discussions’ with several parties ‘who have expressed interest in acquiring Netstore’ and follows a financial review, which has provoked a statement of prior-year figures.

Kingsmill points out that there can be ‘no certainty’ that the present talks will result in a bid for the company, which raised £7 million in November with a placing at 26p. He says that under the new regime Netstore has achieved ‘excellent new business momentum with significant contract wins and renewals’, a unified sales team and ‘increased cross-selling’.

Shares in Netstore, which fell from 43.75p three years ago to 17.5p last month, have edged back up to 20p, up 0.25p this morning, valuing the company at £34.5 million. If the restructuring and new direction do the trick and a decent bid emerges, they could be worth a punt for the bold.    

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AIM news			01/04/2008
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