Services company Admiral last week issued a shock profit warning that sent its share price tumbling and prompted investors to slash approximately £1 billion off the value of IT stocks listed on the UK Stock Exchange.
In his statement at the company AGM on 5 May, Clay Brendish, executive chairman of Admiral, warned that problems associated with the implementation of an internal management system, coupled with a reduction in staff attrition rates were 'likely to result in profit for the first half of 1999 growing less rapidly than last year'.
Despite Brendish's assurances that the situation was 'entirely temporary', Admiral's share price dived 277.5p to 790p during the day, before recovering to 890p at the close of trade.
The profit warning issued by Admiral, a long-time darling of analysts, sent shockwaves through the City. Other high-profile IT stocks, such as Druid, FI Group, Logica, CMG and Sema, also recorded big falls in the wake of the announcement.
Meanwhile, Brendish also revealed that Ceri James, managing director and co-founder of Admiral, would be retiring from the company within the next few months. Officials stressed that James' decision to end his 20-year tenure at Admiral was not influenced by the profit warning.
James will act as a consultant after stepping down as managing director.
Admiral claimed it was engaged in finding a chief operating officer.
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