Shares in Computacenter dive

Computacenter is a leading UK computer networks supplier

Shares in leading UK computer networks supplier Computacenter plunged by 30% on Tuesday after a profits warning.

The company warned that its earnings would be hit by the poor recovery in the IT market from the slowdown in sales following the millennium computer changeover.

Traders decided to sell the stock. It hit a low of 415 pence, a drop of about 225 pence on the day.

The company said it expected profits to be about £55m for this year, compared to earlier analyst forecasts of about £88m.

Millennium bug slowdown

Many computer companies are still reeling from the effects of the millennium bug.

Many IT buyers decided to delay decisions until it was clear that the bug wouldn't cause any problems.

"Computacenter is just the latest to be hit by the technology slowdown., and is also a (victim of) the whole buying cycle, which sees companies invest more in the second half," George O Connor, an analyst at Albert E.Sharp Securities said.

Computacenter said that Microsoft's Windows 2000 has yet to take off and when it does, this will boost sales.

"The majority of the benefit of Windows 2000 will come through next year, it will be a major driver," corporate development manager Phil Williams said.

The company, which provides large scale computer systems to companies in the UK, France and Germany, was floated on the London Stock Exchange in May 1998.