Sherwood International sent its stock diving with a trading update that warned of tough times in the insurance IT sector.

The company is due to publish 2002 results on 4 March, but forecast revenues would fall to about £52m from £56.5m in 2001.

The fall is due to the closure of a loss-making US business, Mattioda, and the effect of the weakening dollar.

The company's stock fell 16% by Tuesday afternoon, the day of the announcement, to 70p.