KBC tanks on profit warning

Software firm KBC plunged on Tuesday after it said it would miss full year expectations after a poor first half.

Shares were off by 20% after the firm reported a "challenging first half which will impact overall performance for the year".

It added that action was being taken to reduce costs and rebalance resources across the group and the poor figures were a "temporary setback".

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Th company has now begun a review of its consulting operations with the objective of a radical restructuring to boost profitability.

Group revenue for the first half was £27.5m, up from £26.0m the year before.

But profits slipped to £0.7m, down from £2.2m in 2011, on higher operating and staff costs.

Chairman Ian Godden, said he expected the second half of the year to show a substantial improvement over the first half.

But he added the exact timing of contract awards, particularly for software licences, would continue to have an impact on the results for the year.

"Looking further out, we are confident that this is a temporary setback for the group," he said.

"We believe that our strategy of expanding our software portfolio upstream, refocusing our consulting operations and our leading position in the growth markets of Asia, and Central and South America will put the group back on a strong growth path in 2013 and beyond."