Morse signals trading alert as chief goes

Shares in Morse fell almost 18 per cent after the technology consultancy warned that its final-quarter trading would be hit as clients reduced discretionary spending.

The company also said that Kevin Alcock, chief executive for just over a year, was leaving with immediate effect.

He is being replaced by Kevin Loosemoore as executive chairman. Mr Loosemoore, who is also chairman of MicroFocus International, the software group, became chairman of Morse in February when Richard Lapthorne retired.

Mr Loosemoore said that for the past few months, “in a deteriorating business climate we have undertaken a review of the company’s operations. The board has concluded that the structure of the group needs to be simplified to allow the individual business units to concentrate on their core competencies”.

The company is being organised into five divisions – investment management consulting, business applications services and three infrastructure services and technology businesses covering the UK, Spain and Ireland respectively.

Results for the full year are expected to be announced on September 9. But the trading statement said that in spite of second-half revenues coming in ahead of the first half, the total for the full year would be “marginally below” the £257.3m reported for the year to June 2007. Earnings before interest and tax are expected to be “broadly similar” to the previous £12.2m.

The company said lower discretionary spending, coupled with a weaker performance in Spain, “means that we have not seen the improvement in operating margins that had been planned”.

But the board remained committed to a medium-term target of 7.2 per cent.