Source - SMW
SysGroup has downgraded its annual earnings guidance, stating it now expects earnings to be significantly below market expectations.

It blamed the downgrade on a switch in focus to managed services, which it said meant that new contract revenue would be recognized over the duration of the contract, rather than upfront.

Earnings would be weighted to the second half, the company said. 

It added, however, that orders hadn't been sufficiently rapid to deliver the required gross margins year-to-date -- and that it would be difficult to claw back that under-performance.

"The board therefore expects that Ebitda and adjusted profit before tax for the full year, prior to the contribution from the recently acquired Rockford IT, will be significantly below market expectations," the company said.

At 9:20am: (LON:SYS) Sysgroup Plc share price was -5p at 36p