ACCOUNTING irregularities have forced business software firm Phoenix IT into a £68m writedown, the company said yesterday.
The impairment, which led to the downfall of chief executive David Courtley and the sacking of Phoenix IT’s auditors Deloitte in October, dragged the company into a pre-tax loss of £63.3m in the six months to October.
The company said that an internal review conducted by PwC found “that the profits of [subsidiary] Servo Limited have been manipulated and overstated for a number of years starting in the financial year ending 31 March 2009”.
Even with this charge taken out, the company’s performance was worse than last year’s. Phoenix IT saw revenues of £124m, five per cent down on last year.
The company blamed this on “disruption on the transition to the new structure,” and reinvestment in certain areas that had “dropped to unacceptable levels”. Executive chairman Peter Bertram, who replaces Courtley, admitted the results were “disappointing”.