Shares in cyber security firm NCC flopped over 14 per cent in early trading on news of a profit warning.
The Manchester-based firm was forced to admit that's first half-year earnings failed to cut the mustard and a gap in earnings from its assurance division had "become too significant to fill in the second half".
“Whilst our forward visibility remains strong, we now do not expect to make up this profitability in the current financial year," said chief exec Rob Cotton. He added:
In our trading update of 20 October 2016, we stated that we had seen three large unrelated contract cancellations in quick succession and one deferral in the assurance division but it was too early to quantify the likely impact. We can today update the market with full year guidance.
NCC's shares took a hammering when it first indicated troubles in its assurance division in October. The FTSE 250 firm's share price dived following the profit warning.
Nevertheless, shares eased back from their initial shock and are currently trading around seven per cent down.
NCC said it expects earnings to be between £45.5m to £47.5m for the year to May 2017, but it still has ground to make up as only 46 per cent of those earnings were generated in the first six months.
Today's earnings downgrade is £6m worse than the full-year expectations of analysts at Jefferies.
Despite the disappointment in the assurance division, overall revenues for the first six months increased by 35 per cent to £125.8m, with organic growth of 18 per cent. Earnings were up by 15 per cent to £21.3m.