Psion sees trouble ahead

Once the byword for mobile computing, Psion is facing some major worries.

Shares in the outfit have fallen 16 percent after a profits warning as Psion is seeing a yearly performance well below expectations.

This year should have been quite good for Psion it had just entered the rugged handheld computer market with its EP10 product.

However the outfit moaned that this year it suffered from supply chain problems relating to one of its products, which is now resolved and exchange rate weaknesses.

It cost a lot for the development and launch costs for the EP10 and it expects a first half loss of £4 million and revenue growth for the full year of between 5 percent and 8 percent.

Having lost £4 million in the first half of the year, Psion will have to make a profit of £13.5 million in the second half just to meet its estimate.

A company spokesman said that sales of the EP10 are looking healthy with approximately 9000 units sold already, and are 16 percent up on last year.

However analysts who spoke to the Guardian said that the profit gap created in the first half will be too large for the company to bridge in the second half unless there are exceptional sales and no more production cock-ups.