Business Systems Group warned the Stock Exchange yesterday that the loss of a £2m contract was likely to hit its profitability for next year.

BSG said it was disappointed to be told yesterday that Mapeley Estates Ltd was not going to renew its current outsourcing contract when it expires in March. This will have no impact on this year's earnings, ending 31 March 2006, but is likely to hit profits next year.

The group's board said it was surprised at the decision and that "the provision of managed services remains key to BSG's strategic direction". The board also said it was investing extra resources to boost sales in managed services to make up the shortfall caused by the lost contract.®

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