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By | Paul Kunert 28th October 2013 14:36

Phoenix IT Group shares plunge on loss of £2m contract

Still ... its nearly Christmas. Sort of

A brief statement from Phoenix IT Group confirming it has lost a £2m contract with a supplier sent the share price into free fall this morning and caused a big dent in the market cap.

The loss-making IT services firm - a third party maintainer which also sells direct to customers - provided very little colour around the confirmation, which dragged down stock to the tune of eleven per cent.

The LSE-listed firm simply stated it had received notification from a supplier of the "termination of its supply contract".

"The group is currently working to mitigate the effect of this and is putting in place alternative arrangements to minimise any disruption to its customers," stated Phoenix.

It added rather mysteriously that in the "longer term" the change will allow it to push out a "broader services portfolio" but on the flip side this fiscal year's EBITDA will be some £2m lighter than previously expected.

Northampton-based Phoenix has endured a troubled couple of years, with results generally headed in the wrong direction. It has seen changes at the top and been through an accounts probe following the discovery of some anomalies in its mid-market unit.

Half-year results are due next month. ®

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