Laundry and linen company Stalbridge has played down concerns that a bungled IT upgrade which cost it £4m to rectify has damaged client relationships.

Fears were raised last week when the Johnson Services-owned group issued a profit warning and said the overhaul of its invoicing system had cost £1.5m to fix while £2.5m of payments had been written off.

The news coincided with the departure of group chief executive Stuart Graham - although the company said this was a coincidence.

Stalbridge managing director Mike Hill admitted there had been problems. "We've got a fabulous reputation but there have been some difficulties that we've had to work through with some caterers," he said.

But Terry Cook, purchasing consultant for contract caterer Charlton House, said invoicing and order problems had caused service levels to "drop drastically".

"Although there is light at the end of the tunnel now, we've looked at alternative suppliers because they were very slow to respond," he added.

Diana Spellman, managing director of purchasing consultancy Partners in Purchasing, said: "We spent an inordinate amount of time and money resolving issues with Stalbridge. Companies really need to provide increasingly efficient services as the world moves towards e-procurement."

By Tom Bill

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