Shares in clinical technology specialist ClinPhone took a dive yesterday after the UK company warned its profits for the year ending 28 February 2008 were likely to be “significantly below market expectations”.
The shares dropped by 37% to around 79 pence (US$1.61). ClinPhone, which only last October posted its first profit since floating on the London Stock Exchange in June 2006, said its forward order book had suffered after operational difficulties in June and July compromised the company’s Randomisation and Trial Supply Management services to some customers.
These problems were due to “a number of unrelated disruptions caused by various external telecoms suppliers, as well as internal data processing issues”, ClinPhone explained. All of these issues “have now been rectified and should not re-occur”, it added.
Another factor playing into the profits warning was that the evolution of the electronic data capture (EDC) market from a licence- to a more service-based model that recognised revenue over the duration of a clinical study (in a similar way to ClinPhone’s historic business) had “accelerated ahead of management’s expectations, the company noted. ClinPhone bolstered its EDC capabilities last October when it acquired US vendor Datalabs for up to US$69 million.
In addition, the current dollar-sterling exchange rate continued to have a negative impact on trading, ClinPhone said. In mid-June it warned that if the exchange rate averaged US$1.95/£1.00 for the year, annual results would likely be at the lower end of analysts’ expectations.
“The Board is reviewing current internal projections and will make a further announcement to the market once July management accounts have been produced,” the company stated.