"It has become apparent over the last couple of months that trading conditions in
the Group's core sponsorship market have become tougher," the UK-listed company said. "Large corporations with whom the Group is discussing significant sponsorship packages are taking
longer than had been anticipated to reach decisions. This has a consequential
impact on the timing of revenue recognition. Although the Group expects to conclude a number of these arrangements over the forthcoming months, these delays have had an impact on the first half performance."
International investment bank Dresdner Kleinwort Wasserstein has lowered its earnings forecasts for the company, amid fears of a sponsorship slump.
Analyst Andrew Lee at Dresdner cut his pre-tax profit estimate for Sportsworld to £14.9million ($21m/EUR24.3m) from £16.9m ($24m/EUR27.5m).
"Whilst US exposure [at Sportsworld] is minimal and traditional advertising respresents only 12 percent of revenues, mixed news surrounding sponsorship makes us cautious about the short-term prospects," said Lee.
But he was confident that Sportsworld would overcome the downturn in the economy.
"Sportsworld Media has undoubtedly been affected by global events in 2001 and the outlook remains potentially choppy. Investors should weather the storm however, as we believe significant potential upside exists for this innovative company."
Shares in Sportsworld plunged as much as 54 percent to 73.5p, the lowest since March, 1999.
