Contract suspension hits Sagentia

Shares in Sagentia are trading down around 10% this morning at 78p after the outsourced R&D consultancy warned revenue would be lower this year than last. Sagentia is suffering because a large project with a North American start-up in the medical sector has been suspended. As a result, despite continued growth in the underlying business, revenue in the first half of FY12 is set to be lower than that reported in H2 FY11. The good news is that Sagentia - chaired by RM and Microgen Chairman Martyn Ratcliffe - has wasted no time taking action to mitigate the event. So, whilst full year revenue is also expected to be lower than last year, anticipated profit remains in line with management’s expectations. Sagentia, which now gets over half its business from North America, also reports early signs of an improvement in the general economic situation, notably in the industrial sector.