Shares in Diagonal Plc slumped 19% to 227.5 pence after the Farnham, UK-based consultancy said that in recent weeks it has experienced a slowdown in the market. A significant percentage of established buyers, it said, had reduced activity levels to focus on the potential problems associated with the year-end.
Diagonal is not unsympathetic to its clientsÆ justifiable period of caution and forecasts that demand will return at an increasing rate early in the new year. It says it is confident that demand for consultancy support of SAP will grow with more emphasis on the front office needs of existing users.
In the meantime, it expects that its performance in the second half of the year will be unlikely to exceed the first six months when net income increased 43% to 2.9m pounds ($4.6m) on revenue up 16.5% at 37.1m pounds ($58.8m).
Diagonal also said it was working on several new and exciting initiatives which will demonstrate its ability to recognize and gain commercial advantage from key areas of technical advance. The company refused to elaborate on the basis that it would alert competitors to its plans.
