Brady bombs following after-hours profit warning

Shares in Brady tanked on Tuesday morning after the commodity trading software company warned sales and profits would be materially below expectation after its markets went from bad to worse, with a major deterioration in trading conditions.

Brady said the conversion of several sales prospects had been delayed as a result of the worsening of market conditions in the commodity sector in which Brady's clients operate, leading management to cut £1.7m of costs to improve future profitability.

"Several of the major commodity trading companies have reported deteriorating trading conditions, issued profit warnings alongside announcements of cost cutting or restructuring measures. The net result of this for our business is that customers and new prospects are lengthening buying cycles," the AIM-listed outfit said.

The company in September confidently predicted its pipeline contained enough firepower to enable it to meet forecasts, but while some of the pipeline has been converted into contract wins, the sales team have seen a "prolongation" of the time required to get deals signed off.

So, while it insisted "most" of the opportunities that were there in September remain good prospects, "they will not be converted into sales in this financial year".

The balance sheet was reported to be healthy with cash in excess of £4m and no debt.

Shares in Brady were down 48% at 40p at 0827 on Tuesday.