SHARES in the Adare printing group tumbled 55p to 470p following the loss of the contract to supply computer manuals to Microsoft Corporation. Its market capitalisation has been cut by some £6 million.

Brokers are now reviewing downwards their profit forecasts for Adare. The group's stockbroking firm, Goodbody Stockbrokers, has already shaved its pre tax profit forecast from £9.75 million to £9.15 million for this year.

A brief statement from Adare said its subsidiary, Mount Salus Press, was "advised" by Microsoft that it has decided to phase out its purchasing of computer manuals from the company and this will be complete by September 1996.

Adare added the other business of Mount Salus Press consists of printing CD booklets for Microsoft, manuals for other leading software companies and printing school books and periodicals. No one was available for further comment.

Microsoft explained that it is consolidating the number of suppliers it uses to provide its manuals in line with the significant shift in software user demand away from traditional printed manuals and towards electronic documentation.

Its print suppliers (including Mount Salus) "were informed of this decreasing demand for print products as far back as July 1994 and were advised to broaden their customer base and seek business to substitute for the forecasted reduction in demand from Microsoft".

The loss of the contract to Mount Salus will be significant and some analysts were surprised at the abrupt nature of Microsoft's decision. However, analysts were forecasting a lower contribution from this business because of the declining demand.

In addition Adare has been growing its business elsewhere, so it is less dependent on the computer manuals business. Adare recently acquired the British printing company, Prontaprint, for £23 million and the Yorkshire company Pillings Printing Company for £0.75 million.

The loss of business according to Goodbody, will reduce earnings per share by just 2p. It has reduced its forecast for this year from 55p to 53p.

Adare acquired Mount Salus from the Kavanagh family last year for £12 million. The consideration comprised cash of £3.4 million and £8.6 million of assumed debt.

Because Mount Salus was so much bigger than Adare, the deal had to be approved by the Adare shareholders. It was purchased at an attractive multiple which was meant to reflect the expected contraction in the computer manual business.

Set up in 1955 as a jobbing printer, Mount Salus moved into printing computer manuals and school books 10 years later. Adare's latest results showed a 413 per cent rise in pre tax profit from £798,000 to £4,098,000.