Shares in Redcentric (RCN) tumbled by two-thirds after the managed IT services company revealed its audit committee had discovered significant mistakes in its historical accounts. The board has launched a forensic review of the company's balance sheets, and finance director Tim Coleman has resigned from his position.
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Management expects to write-down historical profit and reduce net assets - £97.5m on 31 March - by at least £10m. It also pegged net debt on 30 September at about £30m, and thinks underlying debt was significantly higher than reported at the half-year mark. One positive is that the problems appear to be limited to previous periods, and first-half revenue was on track.
