Financial Objects

News that group development director Steve Lane has resigned to pursue other interests came as the latest in a long line of setbacks for beleaguered software developer Financial Objects. Lane's departure, after six years, came just a few weeks after the company admitted that one of its customers had decided to cancel its Activebank banking solution contract. Though not expected to affect the company's performance significantly in its own right, details of the cancellation came just as FO was attempting to regroup after a November profit warning. Back then management had cautioned that the difficult trading conditions noted during the first half were continuing. As a result of these problems, and a £1.7m write off against software development overruns, full year figures are now expected to fall 'significantly' below past market expectations. Interim losses had shown increased losses of £1.2m on revenues 17% lower at £5.7m. Despite FO's woes a few positives remain, however. For one £7.1m remained in the bank at the end of October. For another the groups IBIS software division, from which more than 50% of all revenue is derived, continues to trade profitably. With analysts still forecasting a return to near breakeven in 2004 and the business itself (minus cash) currently valued at just £500,000, Financial Objects will rightly appeal to wealthy speculators. Everyone else should avoid for now.

Sector: Software & Computer Services

Companies: Financial Objects

Market cap: £7.6m

PE Forecast: n/a

Share price: 27p

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