Shares in communications group Sepura Plc (LON:SEPU) lost over half their value on Wednesday after it warned that it may breach bank covenants and its chief executive was taking sick leave.
The stock plunged 28.45p, or 65%, to 15.3p after Sepura, which makes digital radios for business and industrial use, said it may have to ask its lenders to waive certain covenants from next March.
The group also said chief executive Gordon Watling was taking an immediate and extended period of leave to recovery from injuries suffered in an accident earlier this year.
The news came after a fall in orders in the last few months as customers held off from replacing or upgrading equipment due to budget pressures.
Major contract awards in the group’s systems business have also been delayed.
Sepura said it had enough cash for its expected needs, but the lower-than-expected revenues may force it to talk to lenders.
It added that it was looking to make further cost cuts and would update the market as soon as it could.
Acting chief executive Richard Smith said it had become clear that the group would fail to meet its original adjusted earnings target.
"Realigning and reducing the cost base will help mitigate the impact of lower revenues in the current year," he said.
"Our strong sales pipeline continues to give us confidence in the group's longer-term prospects."