Irish IT company Horizon Technology Group today announced it hopes to deliver annual savings of euro 5 million as its shares plunged on the Dublin market.
In response to what it calls ‘overall market conditions’, the group will examine all expenditure with a view to making savings. The company has not yet confirmed if this will include job losses.
To date, the company said they intend to reduce resources put in place to deal with an anticipated higher growth rate and to streamline operations by merging or eliminating smaller service lines.
The company anticipates the cost-cutting program will reduce the Internet Services cost structure by 10 per cent and will be largely completed before 30th June 2001 - the release date for its annual results.
The cost of implementing the cuts will result in a current year exceptional charge of euro 2-2.5 million.
The group has also undertaken a review of its debtor profile and, as a result, will incorporate in its results a euro 1.7 million exceptional item - a provision relating to a single debtor from a Service Provider contract undertaken during the previous financial year to June 2000.
Commenting on the announcement, Mr Charles Garvey, Horizon's ceo, said: "Given the recent and sudden change in technology spending, I feel it is both prudent and appropriate to move quickly to adjust our cost base.
"I am confident that with these changes now underway, Horizon can deliver good earnings growth next year and we will be in a very strong position to capitalise on the eventual recovery in the market.
"Our focus in the next period of our development will also be on ensuring that we can take selective advantage of strategic opportunities provided by the current economic circumstances to grow profitable market share both organically and through acquisition," he said.
Horizon shares plunged this morning and lost over 50 per cent of their value on the Irish stock market by 3 p.m. this afternoon.
