Shares in Riverdeep, the Dublin-based e-learning firm, fell to record lows yesterday following publication of a broker's report that questions the credibility of the company's management.

The report by Merrion Stockbrokers concludes that a "management credibility issue" is a significant factor weighing on Riverdeep's shares. It also says it cannot definitively dismiss concerns about potential accounting issues raised earlier in the year.

The report highlights poor disclosure of financial information regarding revenues and the mismanagement of earnings guidance release for 2003. The broker has also lowered its sales forecasts to $263 million (€264 million) from $283 million for 2003, and downgraded earnings per share to $1.35 from $1.75 for the same year.

Despite an examination of Riverdeep's accounts and discussions with management, Merrion said it could not definitively dismiss potential accounting concerns without independent verification.

"Riverdeep has a track record of inadequate and poor communications with the financial markets. Now, its voluntary delisting from the Nasdaq is likely to be a further negative for the company's rating and could also impact negatively on its business prospects in the US," concludes the report.

Riverdeep, which shares closed down two cents at €1.10 yesterday, is to release financial results today.