Turnaround costs hit Axon shares

IT CONSULTANT Axon Group has revealed that the cost of trying to turn around the business was higher than the City had expected, sending its shares slumping a further 21 1/2p to 65p.

The £1.2m pre-tax profit for the six months to 30 June, compared with £3.6m previously, was lower than forecast. But chief executive Mark Hunter said he believed Axon had turned the corner, recently winning two major contracts with a combined value of £45m.

He said the group, whose shares were floated at 195p, was increasing its workforce from the current 322 to deal with expected growth, particularly in European and public sector markets. Axon has net cash of £11.1m and has maintained the dividend at 0.5p.

'I don't know if the market has improved but our performance has,' said Hunter. 'We have put a lot of effort into moving into new markets for the past two years after realising the internet work would dry up.'