Troubled Harrier shares dive

SHARES in internet security group Harrier plunged 11p to 13 1/2p today as it warned that it would lose money in the first half of this year. Chaired and 29.9% owned by legendary investor Bob Morton, Harrier has seen its shares plunge by 99% since they peaked at 1132 1/2p at the top of the dot com boom in February 2000.

In a desperate attempt to save cash Harrier is asking its directors and staff to take pay cuts of up to 50% for the rest of this year. In return they will be offered new share options at a rate of options over 5000 shares for every £1000 of salary they give up.

Harrier also said it would cancel all previous share options, which are massively under water and therefore currently worthless, and reissue them at a price based on the share price on 1 July. Some 1.7m options, mostly exercisable at 76 1/2p, will be reissued so long as employees agree to the pay cuts.

Some of Harrier's 86 staff will be made redundant as part of a plan to make permanent savings of £1.5m a year. The immediate pay cuts should save up to £150,000 in the short term. Chief executive David Cheesman was paid £121,620 last year.

Harrier said revenues for the current year would be below expectations because the number of orders was lower than expected. Brokers had been expecting sales of £19m for the year, up from £17m.

Last year pre-tax losses fell 14% to £1.14m although before interest, tax, depreciation and amortisation Harrier swung into the black at £200,000 for the first time.