Promethean falls as it is hit by US school cuts

SHARES in interactive whiteboard maker Promethean World plummeted yesterday, wiping more than 25 per cent off the company’s value, as the firm issued a fresh profit warning.

Promethean, which generates most of its revenues from whiteboard sales to US schools, said it had not seen the boost it had expected during the start of the school year. In a trading update for the three months to October, it said cuts to education budgets had been the biggest cause of a fall in sales to £40m, 41.2 per cent lower than the same period last year.

This drop in turnover was far more severe than the 23 per cent fall in the first half of the year, and came during Promethean’s most important period.

“Demand during the key buying season in the US has been lower than recent years,” the company said, partly blaming a delay on a large contract for the fall in sales. “In the short term, the key education markets are constrained by customer funding issues, especially in the US and Europe.”

Yesterday’s profit warning was the second in three months, and pushed Promethean stock down to 14p a share – more than 90 per cent down on March 2010’s initial public offering price.

Investec’s Steve Liechti cut forecasts for Promethean’s annual turnover to £161m, which would be a 28 per cent drop on last year, and 2013’s sales to an even-lower £150m. The firm is also expected to swing to a loss this year.

To combat declining revenue, the firm has embarked on a cost-cutting mission, targeting 25 per cent savings by next year. The firm has also seen chief executive Jean-Yves Charlier quit in July to be replaced by US head Jim Marshall.

The company said it remained positive about growth when budgets expand. “Promethean remains well positioned to benefit when market conditions improve,” the firm said.