The pre-tax profits of Eurolink Managed Services, the Brighton-based IT services company, have more than halved.

The firm has reported a figure of £340,000 for the year to March 31, down from £845,000 for the previous 12 months.

Turnover at £7.5 million was down £700,000 and earnings per share fell from 5.35p to 2.21p.

Chairman David Mann, who took over the role from founder Tony Antoniades in April, said the year had been a difficult one for the company.

"When the group was admitted to Alternative Investment Market during the latter part of 1999, activity levels at certain clients were reducing, partly as the burden of Year 2000 work eased.

"This trend continued for most of the year and was exacerbated by changes in some clients' sourcing policies."

He said the company introduced business development initiatives and during the year it gained a number of new clients.

But because of the uncertainty surrounding the millennium date change, the flow of orders was slow and turnover was slightly reduced during the second half.

However, the group has been active in using and developing its in-house skills in the e-commerce market, providing additional services to existing clients and a further product for potential clients.

Mr Mann said: "The group has recently secured a significant order from an existing client, the benefit of which will be seen in the second half of the year.

"The benefit of the current upturn in business is expected to be seen in the second half of the year."