Shares in Misys dropped after it said the first-half performance in its key banking division was likely to fall short of last year.
The software company, which warned in June that profits would be below expectations in its banking unit, said on Thursday that clients were taking longer to close contracts in banking - its biggest source of revenue.
Misys, which had outperformed the London software and computer services sector by around 25 per cent since the beginning of the year, fell 23 per cent in morning trading to 356p - a two-and-a-half-year low.
"Whereas there were no surprises in the historical results the disappointment for the market place is on the banking outlook," said Mr Ashley Thomas, analyst at Commerzbank, which rates Misys a 'sell'.
Misys reported pre-tax profit of £140 million sterlingfor the year ending May 31st, up on last year's figure of £123 million, and at the higher end of the range of analysts' forecasts from £97 millon to £145 million.
Chairman Mr Kevin Lomax said today there was no evidence the delaying of orders in the banking unit was getting any worse, and customers were closing deals eventually.
The company is also laying off about 5 per cent of staff in the banking unit. Misys said those staff would mostly be those involved in support and servicing older products.
The banking division employs about 3,000 people, Mr Lomax said, and the job cuts would result in a charge of "a few million pounds" in the first half of the financial year, although he did not give an exact figure.
PA