Silanis continues to test the patience of investors, having followed disappointing maiden AIM interim figures with a severe profits warning for 2007.

The provider of electronic signature solutions, which drive efficiencies and savings for insurance, financial services and government clients including the US Federal Government, surrendered 67% of its value on news that annual numbers to December 2007 will fall ‘materially’ short of forecasts due to delays in closing contracts. As a result, trading for the year will be ‘broadly in line’ with the first half, when Silanis lost $800,000 (£400,000).

Though disappointing, management insists interest in the company’s software solutions, used by more than 1,400 government and commercial organisations, is on the rise. And based on an accelerating market trend towards adopting electronic signature systems in the US and EU markets, the company ‘expects to return to profitability’ in 2008 as it returns to aggressive growth.

A Canadian concern doing most of its business in the US, Silanis joined AIM last summer, raising £10m through a (significantly oversubscribed) placing priced at 46p. Funds were earmarked for investment in sales and marketing, and research and development, in order to capitalise on a growing global market for e-signatures, which eliminate paper inefficiencies and create auditable and legally enforceable records for compliance purposes.

Though disappointments have decimated its market value, the business made pre-tax profits of $2.8m from $8.5m sales in 2006. Long-term prospects may intrigue, but the shares should be avoided for the time being.

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Silanis International	AIM	£1.41m	6.50p	0.00p
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