TELECOMS company BNS Telecom Group yesterday warned that full-year profits in one of its key divisions may be £1.3m less than expected.

The Northumberland firm said that it is "considering all options" for its network services division after a review of the business revealed that it was unlikely to achieve its targets.

In a trading statement yesterday, BNS said: "The preliminary findings of this review have revealed a significant underperformance during the third-quarter and an over ambitious expectation for the final quarter of the financial year."

The performance indicator was given against a backdrop of BNS having seen a 47 per cent slide in half-year profits to £654,000 across the group in October last year.

Goodwill of up to £2.1m associated with the business will also be subject to review as a result, ahead of the close of its financial year on July 31.

However, Prudhoe-based BNS said that despite the uncertainty in network services, its core business re-seller division and two recently-acquired divisions of mobile phone company 3G were trading in line with expectations.

The BNS share price fell yesterday on the back of the trading update, closing at 32.50p - down more than ten per cent.