IT group Redcentric has seen its shares plunge 66 percent after it discovered accounting irregularities and gave notice to its finance director.
The company said the “misstated accounting balances” related to previous year’s figures and would mean a write-down in some historic profits.
The discrepancy meant it would need to reduce its net assets by at least £10 million and its debt would now be around £30 million compared to the £17 million or so it suggested in September.
But now the IT managed services provider said it had experienced good sales momentum during the year ended in March, with a number of key contract wins and renewals in both the public and private sectors.
Net debt at the end of March was £39.5 million, down from £42 million at the end of November.
Redcentric said it had made good progress with the remedial programme it had outlined in December, with its finance team further strengthened and number of improvements made to its internal systems and controls.
Redcentric will report full year results on June 29.
Chief Executive Officer Fraser Fisher in a statement that he was pleased to report that trading is in line with expectations.
“Throughout the challenges at the end of last year, we have continued to enjoy the support of our stakeholders including customers, banks and loyal colleagues. A great deal of work has been carried out in the past few months to execute the remedial plan, strengthening our reporting and control systems,” he claimed.