Microgen Holdings Plc, the UK-based information archiving company, has been found guilty of hugely underestimating the speed of decline in its core business with the issue of its second profits warning in five months. The company now estimates that its pre-tax profits for the year to April 30 will fall 1m pounds short of current market expectations to just 6.3m pounds compared to 8.8m pounds last time. The first warning came in July with the interim results. The problems are down to a rapid decline in demand for computer output to microfilm, historically the group’s core business, as companies switch to electronic storage. Chairman Douglas Lee has consistently maintained that the speed of decline would be impossible to predict, but the latest shortfall has wiped another 12% off the company’s value as the shares fell to 88.5 pence. The July warning was greeted with a similar 20% decline. The company has also had cost overruns on its new alternative microfilm product called Axcess (CI No 3,206).
