IT solutions integrator Comparex has warned investors it will produce headline earnings for the year to May below those previously reported, due to a "substantial trading loss" in its European operations and subdued African business.
The profit warning follows a previous trading update issued in March informing the investment community of lower results for the current financial year.
European operations continue to disappoint, and Comparex management says the company will report a "substantial trading loss for the second half of the 2002 financial year".
The group will cut staff at its Belgium and Netherlands operations in an effort to lower overheads.
Comparex reduced its Spanish and Netherlands staff by 52 in March when it announced its original profit warning.
African business is also suffering and the board says operations on this continent will report a trading profit lower than that of the first half of the full period.
Cash resources at Comparex remain strong, with R2.4 billion in the coffers.
The group says it will retain available cash, opting to build the group`s European operations organically, substituted "where appropriate by prudent complementary acquisitions".
The group also informed the market that it aims to introduce empowerment into its African business before unbundling those operations.
The news drove the Comparex share price down by 110c or 13.1% in early trade, with the share changing hands at 730c by mid-morning today.
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