Kewill scraps break-even pledge

SOFTWARE group Kewill Systems has reneged on its pledge to break-even in the six months to the end of March, following a sudden deterioration in business.

The firm's second earnings warning in six months sent the shares tumbling 8 1/2p to 25 1/2p. They hit 3113p at the peak of the technology boom when Kewill was considered one of the country's brightest prospects.

Kewill said sales at its electronic commerce division had suddenly reversed, with orders in America slipping 30% in the three months to 31 December against the previous quarter. Although there were signs of a tentative upturn, it was 'unlikely that this will be sufficient to achieve group break-even in the second half of the financial year'.

With full-year operating losses now likely to approach £8m and chairman Andy Roberts describing conditions as 'extremely tough', the group is trying to conserve its dwindling cash. The £11.5m it had at the end of September is likely to fall to £8.5m by Kewill's 31 March year-end.

Roberts said US sales, which contribute 80% of its revenues, continued to suffer after 11 September. It plans to cut more costs.