IT recruiter and services provider Xansa disappointed shareholders with a warning that its second-half turnover will not meet forecasts.

The company blamed continued tough market conditions and the completion of significant contracts in the UK and the US for its failure to achieve revenue targets.

Xansa is expected to produce sales of around £225m for the first half of the year and £445m for the full year.

Analysts suggested that Xansa had not lined up a significant enough number of good-sized contracts to compensate for the ones that were coming to an end.

But Xansa executives insisted this was not the case. “Our pipeline of new business opportunities is healthy,” the recruitment company said in a statement.

Xansa’s results will be further impacted by a £12.5m charge for settling a dispute with a customer over a project. The news sent Xansa’s share price down 8% and it has continued to fall since.