Shares in recruitment group Marlborough International have hit a new low after the group warned of a loss in the second half of its financial year to the end of February. Profits for the full year will be well below current market expectations.

The loss in the second half means that, at best, Marlborough will report pre-tax profits of €4.1 million - the profits figure for the first half to the end of August. Analysts had been expecting pre-tax profits in the order of €7.5 million for the full year, which indicates the scale of the current difficulties for the group.

Marlborough shares, which trade infrequently and in small volumes because of their tight liquidity, fell 10 cents to €1.10. This means that the shares have fallen 30 cents from their end 1999 level of €1.40 and little more than one fifth of their 1999 high of €5.35. In London the shares fell 17 1/2p to 71 3/4p sterling although only 285 shares changed hands.

Part of the profits warning is over a tightening of margins in Ireland where higher operating costs have meant that fee income has been below expectations. Staff costs have risen sharply, resulting in an increase in operating expenses.

But Marlborough has also written off €1 million as a result of a failure in the group's debtor control systems. In addition, Marlborough has written off €300,000 against its investment in the online recruitment operation www.fillthejob .com.