Book-keeping probe at Guardian IT

GUARDIAN IT has called in independent forensic accountants after discovering book-keeping discrepancies worth more than £2m. The computer disaster recovery specialist has also slashed its profits forecast, its second downgrade in less than two months.

Chairman Richard Raworth has offered to resign but said the board had asked him to stay on 'while the current issues facing the business are addressed'.

New finance chief Neal Roberts has recruited KPMG to investigate the accounts. The discrepancies relate to the year ended December 2001 and earlier, Guardian said, and would be charged as one-off costs in its full-year results.

The firm is also raising its bill for other one-off costs, including writing off millions more on its Heathrow recovery centre.

The stock plunged 36% in early trade to 47 1/2p. It traded at 1020p last year.

The foul-up comes just two months after the Guardian admitted it had overstated sales forecasts, and that it would have to ask banks to relax covenants on its £110m debt.

In its latest statement, Guardian cut its full-year 2001 forecast to £11.5m-£12.5m, from £13-£14m previously. The company would delay publishing the results until April pending the outcome of the KPMG investigation.

Guardian said it would take a further £10-£11m charge against operating profits relating to its Heathrow recovery centre, other reorganisation costs - it is closing its New York office - and for abandoned projects. Guardian also predicted a further writedown of up to £8m against the Heathrow centre.

The firm warned of further one-off charges stemming from a review of its goodwill accounting. It was too early to provide an estimate.