Kewill Systems

Kewill's flagging share price received a much-needed boost on account of a positive trading update. Over the past 12 months the shares have slumped from a high of just over £10 to current levels, bottoming out at 30p in mid-September following a profit warning and the terrorist attacks on New York and Washington. The profit warning, which was delivered in August, saw supply-chain-management solutions business Kewill admit that sales in the first four months had been 'substantially below expectations' and that full year profitability was highly unlikely unless conditions dramatically improved. As a result of this statement broker forecasts were slashed. Market consensus had originally predicted that Kewill would continue to build on the success of last year, when pre-tax profits leapt 83% to £3.3m, with a profit in the region of £6.5m expected. Losses of around £5m are now being touted. Kewill's most recent update confirmed that first half figures are likely to be in line with these revised estimates, but stated that performance in the second quarter had shown a 'substantial improvement'. Although the dramatic improvement remains highly unlikely, management holds the belief that second half breakeven, at the operating level, is a distinct possibility.

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Sector: Software & Computer Services

Companies: Kewill

Market cap: £32.1m

PE Forecast: n/a

Share price: 42p

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