Advtech`s share tumbled 8% on the JSE yesterday after the IT education, training and placement group issued a profit warning.
The share touched an intraday low of 32c before recovering marginally to close at 33c.
The group issued a notice saying that earnings for the six months to 30 June 2001 "will be materially lower" than those of the same period last year.
It blames the situation on various factors including the underperformance of certain operations within the resourcing division.
Other reasons given include "additional interest costs as a result of increased gearing primarily through payment of vendor liabilities coupled with the expensing of previously capitalised interest as development expenditure".
Costs of continuing litigation against vendors of certain key operations in the resourcing division were also listed as a factor in the profit announcement.
Advtech says that another issue affecting earnings was that the management team was substantially preoccupied in the reporting period with negotiations with various potential third-party bidders for the business of the company, which had an adverse impact on operations.
The group announced in July that it was no longer for sale and was embarking on litigation to reclaim some cash from the purchase prices of the Communicate Group and the Bryan Hattingh Group in respect of the earn-outs and warranties they provided at the time of purchase.
The executives of the Bryan Hattingh group launched a concurrent counter claim on the matter of commissions.
Advtech adds that subsequent to the end of the six months, the board has been reconstituted, the management team has been reorganised, the CEO has been replaced, the shareholder base has been stabilised and an improvement in operating performance in all divisions is evident.
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