Shares in Sheffield-based software and technology group Servelec fell sharply this week, after the company issued a profit warning on Wednesday.

Servelec, which operates across health and social care, technologies and the oil and gas sector, is best known in the NHS for its RiO electronic patient record, the most widely used patient record system in mental health. 

The company warned that operating profits for 2016 financial year will be significantly lower than market expectations and lower than previous year.  The news initially knocked off a third its shares’ value.

The firm said it has taken swift remedial action, “reallocating company resources and reducing costs”.

In its health and social care division, the company said that its “North New” operation has recently won two new contracts and an order for a mental health system for St Patricks in Ireland.

The company said progress was being made with the refresh of NHS contracts the North of England, the “North Refresh”, had been slower than previously anticipated​.

This was because the deadline by which trusts were required to update their software and associated technology, had again been extended by the government to ease funding pressure, the company said.

The trading update stated: “Whilst the performance of social care provides some mitigation, the overall outlook for health and social care in FY16 has been impacted.   In response to this management have reallocated resources to focus on sales and have reduced project implementation and other costs.” 

Servelec’s chief executive Alan Stubbs said: "I am disappointed to have to report the difficult trading conditions that have impacted our outlook for FY16. We don't believe that this reflects upon the quality or scale of the opportunities across our target end markets.”