Local markets didn`t waste any time this morning in responding to Idion`s profit warning released after markets closed yesterday, hammering the counter down 45% in the first hour of trade.
Idion announced its fourth quarter international sales were "well below expectations" and accordingly, the group will report a loss for the year to December.
The last half of the year is traditionally the stronger half, with the company deriving the majority of its sales in the third and fourth quarters.
While the third quarter showed strong revenue growth - a record performance for the company - the group has blamed its US subsidiary Vision Solutions` poor performance in the last quarter on a slowdown in the global economy and longer sales cycles.
Idion is in a closed period ahead of its financial results, due on 26 February, and as a result cannot comment further on the profit warning.
However, when Idion CEO Nicolaas Vlok spoke to ITWeb in late November, he was buoyant about the company`s future, saying Vision was reaping the rewards of increased demand for security products following the 11 September attacks.
"While the market is still challenging, Idion has never had a more receptive audience. We are seeing a lot more companies asking for proposals and considering investing in disaster recovery technology in the next financial year, so we expect long-term, rather than short-term benefits," he said, adding that he expected to increase market share by double digits next year.
Local markets did not respond well to the warning, with the share losing 45% of its value by midmorning, trading at 55c after a 100c close yesterday.
Idion previously reaped the benefits of its exposure to Vision Solutions, when its share price moved up sharply as investors looked for rand hedge stocks as the currency began its downward spiral. The counter rose from 45c in November to 140c by mid-December.
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